Indonesia has asked coal producers to submit their sales data until the end of this month as the world's largest coal-exporting nation could potentially consider requests for additional annual output quotas (RKABs) in July, market participants said.
Some small and medium-sized producers have exhausted their annual quotas and are now selling from stockpiles, an Indonesian trading firm said. The current discussions with authorities involve potential quota adjustments and revisions to domestic market obligation (DMO) allocations, and a formal review could take place next month. But this could not be confirmed. Indonesia's energy ministry did not respond to a request for comment.
Indonesia has set its coal production target at 600mn t for 2026, down from a revised 817.5mn t last year. Jakarta seeks to tighten control seaborne coal supplies and have stricter oversight of exports. The lower output guidance led to cuts to annual output quotas for several Indonesian producers, tightening supply for both export and domestic markets. Some producers think that authorities might relax the output curb given that most Indonesian coal prices are hovering at near three-year highs. But the policy direction could become clearer only after authorities review the sales data, adding to the ongoing policy-side uncertainties in Indonesia.
The coal market is also grappling with Indonesia's policy shifts to tighten control over the trade of key natural resources — including coal, palm oil and ferrous alloys — to curb under-invoicing.
Indonesia's sovereign wealth fund Danantara on 5 June sought to clarify the government's supervisory role and assuage some industry concerns about the status of existing contracts and the extent of state involvement in export transactions.
A state-owned entity under the fund, Danantara Sumberdaya Indonesia (DSI), will monitor export flows through a digital platform and analyse transaction data to detect potential under-invoicing, Danantara said. Existing contracts can continue provided no under-invoicing is found, it added.
The DSI has pledged to safeguard the confidentiality of commercial and contractual information, Danantara said, adding that the exporters already adhering to "sound export practices" are not expected to face disruptions.
Following a transition period that started this month, DSI will act as an intermediary to facilitate and oversee export flows, while allowing producers and traders to maintain their existing commercial relationships.
"This role is important to ensure that no disruption occurs to the export process for strategic natural resource commodities, while also achieving the primary objective of trade that is fair, transparent and free from under-invoicing practices," Danantara said.
The implementation of DSI's role will be evaluated periodically, with adjustments made based on ecosystem readiness, it added.
Pricing oversight
Pricing will follow a "standard methodology" that is fair, transparent and accountable, Danantara said. The framework will allow for adjustments based on quality, specifications, logistics costs and contract structures.
Indonesian thermal coal prices are holding steady, but new reporting requirements linked to DSI for counterparties starting 1 June appear to have slowed trading activity in the past week.
The rally in coal prices in recent weeks has been driven primarily by tight supply following production cuts and strong summer demand from Asia.
Argus last assessed Supramax cargoes of GAR 4,200 kcal/kg coal at $66.30/t fob Kalimantan on 5 June, the highest level since 19 May 2023. Prices for Panamax shipments of the same grade were assessed at $68.13/t fob Kalimantan, the highest level since Argus started assessing this market in 2024.
