Jakarta, CNBC Indonesia - Coal prices have levelled off after soaring\nhigh. According to Refinitiv, the June coal contract closed at US$135.8\nper tonne, down 0.44% in trading on Tuesday (13\/5\/2026).<\/p>\n
This weakening contrasts with the 1.45% surge on Monday. Coal prices\nhave stabilised following more negative news from China.<\/p>\n
After reporting a decline in imports, China has delivered further\nnegative updates.<\/p>\n
Total coal imports in April 2026 reached 33.08 million tonnes, down\n12.54% from the previous year and 15.3% lower than in March.<\/p>\n
The thermal coal market at Chinese ports has also tended to stabilise\nafter previously strengthening, amid a tug-of-war between support from\nhigh supply costs and weak demand from end consumers.<\/p>\n
Transaction activity at major Chinese ports has begun to slow as\nbuyers adopt a cautious approach entering the low season, while sellers\nmaintain prices due to persistently high production and import\ncosts.<\/p>\n
Weak demand is primarily driven by electricity consumption that has\nnot yet risen significantly, ample coal stockpiles at power plants, and\nseasonal conditions not yet peaking in summer.<\/p>\n
On the supply side, import coal prices, including supplies from\nIndonesia, remain high, providing a floor for domestic Chinese prices.\nIn other words, even as buyers hold back, sellers are reluctant to cut\nprices too deeply due to limited profit margins.<\/p>\n
Overall, this situation has left the thermal coal market at Chinese\nports moving sideways.<\/p>\n
High supply costs are supporting prices, but weak demand is hindering\nfurther increases. This scenario is crucial for Indonesian exporters, as\nChina is Indonesia\u2019s primary market for thermal coal.<\/p>\n
El Ni\u00f1o: Can It Boost Coal Prices?<\/p>\n
UBS warns of the potential emergence of a \u201csuper El Ni\u00f1o\u201d phenomenon\nstarting from mid-2026, which could tighten the global thermal coal\nmarket through sea routes and drive prices higher. In this scenario,\ncoal producers from Indonesia and Australia are expected to be the main\nbeneficiaries.<\/p>\n
The World Meteorological Organization (WMO) predicts that the El Ni\u00f1o\nphenomenon will develop in the coming months. Some scientists even\nassess this event as potentially the strongest of the century, driven by\nhigh sea surface temperatures in the Pacific Ocean.<\/p>\n
According to UBS, El Ni\u00f1o typically triggers extreme and prolonged\nheatwaves in Asia. This is significant because coal-fired power plants\naccount for about 70% of electricity supply in India and around 55% in\nChina, and still dominate the energy mix in many other Asian\ncountries.<\/p>\n
Increased use of air conditioning is expected to boost coal\nconsumption and imports. At the same time, changes in rainfall patterns\nin Latin America and Africa could reduce hydroelectric power production,\nwhich has historically contributed a large share of electricity\ngeneration in those regions.<\/p>\n
UBS assesses that this risk emerges when the global energy system is\nalready under pressure due to the conflict between the United States and\nIran, potentially exacerbating energy supply tightness.<\/p>\n
On the supply side, UBS notes potential constraints from Indonesia\u2019s\nnew export quota policies. However, based on recent industry visits,\nIndonesian authorities are deemed willing to approve additional export\nquotas once coal prices rise.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/coal-prices-slump-awaiting-el-nino-for-takeoff-1778633558", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }