silver steel mining crane on black rocky soil during daytime

Thermal Coal Poised for the Next Price Leap

Thermal coal was an expensive good in 2021, could gain almost 300% in peak after the COVID pandemic outbreak in 2020. However, the price storm came to an end towards the end of October after China decided that the domestic economy is more important than the climate balance and has unceremoniously ordered domestic coal mines to maximum production. This allowed coal prices to level off again but are still not at the same level as before the start of the pandemic.

Now, however, coal prices could get a new boost, as Indonesia has banned coal exports for January. According to official sources, Indonesia has to take this step to avoid power outages in the country. In addition, the country has a Domestic Market Obligation (DMO) policy that requires coal producers to sell 25% of their production to domestic power plants at a maximum price of $70 per ton. According to statements, the last deliveries were below the required percentage, which led to a decrease in stocks and now results in the export ban. The producers, however, will be far from satisfied with this price, which is far below the current market price of $140 per ton.

The countries which will be most affected by this are China, India, Japan, and South Korea, as these are the main buyers of Indonesian coal.

2 thoughts on “Thermal Coal Poised for the Next Price Leap”

  1. Pingback: After Export Ban on Coal, Risk of Disruption of Other Commodity Supply Chain in Indonesia Increases – NATURALDEPOSIT

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