China's Second Power Shortage? ... Alert Over Indonesia's Coal Export Suspension

China's Ban on Australian Coal Imports Leads to 178 Million Tons of Indonesian Coal Imports Last Year
Concerns Over Supply Shortages if China’s Suspension of Indonesian Coal Exports Prolongs

[Asia Economy Beijing=Special Correspondent Jo Young-shin] China is on high alert over Indonesia's coal export suspension. Of the coal China imported last year, 61% was Indonesian. After banning Australian coal imports, China has increased its imports of Indonesian coal.

[Image source=Yonhap News]

According to Chinese media such as Zhonghua Net on the 3rd, Indonesian authorities fully banned coal exports for the entire month of January due to concerns over power shortages caused by coal shortages.

Chinese media reported that Indonesia, a major coal exporter, halted exports due to a shortage of coal for domestic use. They explained that heavy rains and the La Ni?a phenomenon disrupted normal coal mining operations in Indonesia's Kalimantan region, causing coal shortages.

China is highly tense over Indonesia's coal export suspension. As of the end of November last year, China imported a total of 290 million tons of coal. Of this, 178 million tons, or 61%, were imported from Indonesia. The share of Indonesian coal in China's imports expanded from 46% in 2020 to over 61% last year. With the ban on Australian coal imports, dependence on Indonesian coal has significantly increased.

Chinese media estimate that over 70% of China's coal imports on an annual basis last year were Indonesian. If Indonesia's coal export suspension prolongs, the impact on China's economy will inevitably be significant. China experienced power shortages due to coal shortages from September to November last year.

Chinese media cited a notice from Indonesia's Ministry of Energy and Mineral Resources stating that coal exports will normalize once domestic coal supply to power plants is fully met, but it remains unclear when exports will resume. They expressed concerns that if the export ban prolongs, imbalances in China's thermal coal (heating coal) supply could occur. Northern regions of China, including the three northeastern provinces, typically require heating until mid-April.

Chinese media also covered the backlash from Indonesian coal-related companies. After the Indonesian government unilaterally announced the coal export suspension, related companies are urging the lifting of the export ban. Chinese media reported that these companies argue that coal import customers might shift their sourcing to other countries such as Russia, Australia, or Mongolia due to the export suspension. They also claim that the coal export suspension could cause a counterproductive rise in global coal prices.

This content was produced with the assistance of AI translation services.