Indonesian coal sector suffers due to India’s dropping demand

Indonesian coal miners are struggling with slow demand this year as businesses in India, one of the country’s major coal markets, hit the brakes due to a prolonged lockdown to contain the COVID-19 pandemic, a data firm has said.

21, May. 2020

image-1590022354680.jpg

JAKARTA, VNA - Indonesian coal miners are struggling with slow demand this year as businesses in India, one of the country’s major coal markets, hit the brakes due to a prolonged lockdown to contain the COVID-19 pandemic, a data firm has said.

India’s coal imports, a commodity mostly used for power generation, is projected to decrease by 19.1 percent year-on-year to 149 million tonnes, according to IHS Markit.

As a result, IHS Markit projects a 10 percent decline in Indonesian coal exports to 406 million tonnes in 2020, from last year’s figure of 451 million tonnes.

IHS Markit coal, metals and mining senior director James Stevenson said India’s lower import projection was a result of slumping business and industrial activity during the country’s prolonged lockdown.

The consultancy now expects that India will reduce its imports by about 35 million tonnes, he added.

It initially projected Indonesian coal exports at 419 million tonnes before India announced an extended lockdown and before market conditions worsened in Southeast and East Asia, which are Indonesia’s other major coal export markets.

India went into lockdown on March 24, when most businesses shut down. The country has extended the lockdown four times, which is expected to last until May 31.

Indonesia is the world’s largest coal producer and dry fuel contributes 14 percent of the country’s exports, Statistics Indonesia (BPS) data shows. - VNA