Jakarta, CNBC Indonesia – Indonesia’s coal exports to China have soared sharply this year. China has become the savior for Indonesia’s coal exports in the midst of a collapse in demand for black sand.
Data from the Central Statistics Agency (BPS) show that the coal export market is still dominated by countries in Asia. Of the 16 major Indonesian coal markets, only Italy is a country outside Asia.
The large demand from Asia is caused by three factors. Among them is higher economic growth compared to other regions, especially Vietnam and the Philippines.
Another factor is the heat wave that hit Asia in May-June and Asia’s continued dependence on fossil energy.
The total volume of coal exports in June 2023 was recorded at 28.60 million tonnes. This number fell 9.54% compared to the previous month (month to month/mtm) and fell 16.2% (year on year/yoy).
India is still the main export destination with a volume of 6.11 million tonnes. This number fell 27.66% (mtm). China is in second place with 4.74 tonnes. This number did fall 37% (mtm) but jumped 26.4% on an annual basis.
Interestingly, coal exports to a number of countries jumped by hundreds of percent in June this year compared to the same period last year (yoy).
The spike is closely related to the heat in the Asian region, especially Southeast Asia.
The cheap price of coal this year has also enabled Asian countries to buy up black sand. For the record, coal prices flew last year after the Russian-Ukrainian war broke out.
Exports to Vietnam were recorded at 3.62 million tonnes in June 2023 or flew 205.4% (yoy) while exports to Bangladesh jumped 234.6% to 714 thousand tonnes.
Shipments to Cambodia shot up 686.3% to 531.2 thousand tons in June this year. Meanwhile, exports to Italy still jumped 156.9% to 196.2 thousand tonnes.
Judging from the value, Japan is the largest foreign exchange earner from coal in June.
The value of coal exports to Japan reached US$ 413.2 million. This value jumped 14.6% (mtm) but fell 20.6% (yoy).
Behind Japan is India with an export value of US$ 406.3 million. This value fell 29.8% (mtm) and fell 72.1% (yoy).
Overall, total coal exports in January-June 2023 or the first semester of this year reached 181.57 million tons. The volume rose 6.44% compared to the same period.
The increase in volume this year is understandable considering that Indonesia banned coal exports in January 2022 so that export volume in the first half of 2022 was much lower.
Exports to China jumped 61.23% in the first semester of 2023 with a total of 40.83 million tons. Exports to China have jumped dramatically this year due to the heat wave that hit China.
Heat waves have hit China since May and are becoming more widespread this month.
In mid-June, China’s capital city, Beijing, was ‘baked’ by extreme hot temperatures and a record 39.4 degrees Celsius. The heat wave continues this month.
Chinese authorities on Monday called the weather ‘hell’, where temperatures have reached a record 52.2 degrees Celsius (126 degrees Fahrenheit) in the northwest of the country over the weekend. This is a record high for mid-July.
However, China is not the biggest destination for coal exports this year. India is still the biggest market for Indonesian black sand.
Indonesia’s coal exports to India reached 48.97 million tons in January-June 2023. This amount fell 20.6% compared to the same period last year.
The decline in exports to India was mainly due to an increase in their domestic production.
India’s coal production even rose 8.4% (yoy) in April-June 2023 to 222.93 million tonnes. India imported large quantities of coal last year due to the energy crisis.
In terms of value, coal exports were recorded at US$ 19.11 billion in the first semester of 2023. This value fell 9.8% compared to last year.
The biggest foreign exchange earner from coal exports is China with a value of US$ 3.81 billion. This value jumped 26.11%.
Under China are India, Japan and Vietnam.
CNBC INDONESIA RESEARCH
