Spotlight on Indonesian thermal coal shipments

This week’s Market Monitor highlights a notable shift in thermal coal trade flows, particularly in the evolving import strategies of China and India. According to the latest dry bulk flow data, Indonesia continues to account for 48% of global thermal coal exports, with Taboneo and Muara Berau remaining the most active origin terminals. However, Chinese and Indian buyers are increasingly turning to higher-grade coal alternatives from countries such as Australia and Russia. This trend appears to be mainly driven by the current downturn in global coal prices, which has made energy-dense coal from non-Indonesian sources more cost-competitive.

World Bank data confirms that Australia’s Newcastle 6,300 kcal/kg FOB coal price averaged $104.41/t in May 2025, up approximately 6% from $98.61 in April, but down about 26.5% compared to $142.01 in May 2024. Meanwhile, as early as March, trends indicated that railborne coal imports from Mongolia and Russia were gaining share, as improved infrastructure made land transport cheaper than seaborne alternatives.

China continues to dominate, receiving 42% of Indonesian coal shipments, followed by India at 19%. However, both nations are showing a clear shift toward sourcing coal with higher calorific values. At the same time, Chinese seaborne coal imports are being gradually displaced by rising domestic coal production, which is a trend reinforced by policy support and the continued approval of new coal-fired power plants.

In Q1 2025, China approved 11.3 GW of new coal plant capacity, surpassing the 10.3 GW approved in the entire first half of 2024, signaling continued support for domestic coal infrastructure. In early June, the China Coal Transportation & Distribution Association projected that coal imports could decline by 50–100 million tonnes in 2025, stemming from significantly higher domestic production and state directives to reduce imports and stockpile local coal.

Source: Signal Ocean