The Indonesian coal market has recently sent out several key signals worth paying attention to.

First, let's look at production. Indonesia's mining sector announced that next year's nickel production quotas will be adjusted based on actual demand, and approximately 600 million tons of coal production targets may also be approved. Historically, Indonesia's coal output was 836 million tons in 2024, and it is expected to decline to around 750 million tons in 2025, showing a clear downward trend. The figure of 600 million tons sounds alarming, but in practice, it is unlikely to fall that sharply— a more realistic trajectory should be around 700 million tons.

But that's not all. Domestic coal demand in Indonesia continues to grow, which means the available export surplus will be further compressed. As a result: although production has not plummeted, export volumes are accelerating their decline, directly pushing up international coal prices.

Now, let's look at the change in export tariffs. The Indonesian Ministry of Finance disclosed on January 5th that, although the legal documents have not yet been officially issued, coal export tariffs have been levied since January 1st and will be retrospectively collected. The tax rate is tiered: 5%, 8%, 11%, depending on coal prices. To offset cost pressures, Indonesian sellers have already raised their quotes, with the prices for medium- and low-calorie coal generally increased by $2 to $2.5 per ton.

The combination of these two factors—tightening supply and increased tariff costs—has basically sealed the upward trajectory of Indonesian coal prices.