APBI calls to coal producers for output cuts
2020-07-01 08:36:11 [Print]
The Indonesian Coal Mining Association (APBI) has asked its members to cut output by 40-50 million tons during June-December to prevent a freefall in prices. The group expects exports to fall by up to 60 million tons in a challenging 2020 due to a lull in demand from China and India.
The association has advised its 89 coal-producing members to work together and offer "disciplined" and "coordinated" supply cuts to improve margins.
Indonesia's coal output in January-May fell by 8.5% YOY to 229.1 million tons amid signs of an accelerating decline in monthly production, according to energy ministry data. The APBI said that January-May output was 20 million tons lower on the year but that even steeper cuts will be needed.
Indian coal imports could decline by 30 million tons on the year in 2020, with 22-27 million tons of this drop coming from Indonesia, the APBI said. India is Indonesia's second-biggest market for its thermal coal exports.
Indonesian coal exports for the full year could decline by as much as 50-60 million tons against last year to 394-404 million tons, the association said. This means that monthly shipments to the seaborne market will likely fall short of 2018 and 2019 throughout the remainder of this year.
At the same time, domestic demand for coal is also expected to drop to 128-138 million tons for 2020, lower than the country's earlier forecasts of 155 million tons and actual consumption of 138 million tons in 2019.
The association has advised its 89 coal-producing members to work together and offer "disciplined" and "coordinated" supply cuts to improve margins.
Indonesia's coal output in January-May fell by 8.5% YOY to 229.1 million tons amid signs of an accelerating decline in monthly production, according to energy ministry data. The APBI said that January-May output was 20 million tons lower on the year but that even steeper cuts will be needed.
Indian coal imports could decline by 30 million tons on the year in 2020, with 22-27 million tons of this drop coming from Indonesia, the APBI said. India is Indonesia's second-biggest market for its thermal coal exports.
Indonesian coal exports for the full year could decline by as much as 50-60 million tons against last year to 394-404 million tons, the association said. This means that monthly shipments to the seaborne market will likely fall short of 2018 and 2019 throughout the remainder of this year.
At the same time, domestic demand for coal is also expected to drop to 128-138 million tons for 2020, lower than the country's earlier forecasts of 155 million tons and actual consumption of 138 million tons in 2019.
