Coal Prices Plunge Nearly 9%, Is Indonesia Playing a Part?

Coal prices remain in a negative trend, weakening for four consecutive days. On Wednesday (17/6/2026), coal prices closed at US$135.35 per tonne, down 0.11%. This decline extends the commodity’s misery, which has slumped 8.9% over the four-day losing streak. Besides the weakening of oil prices, coal prices have fallen due to a slew of negative news. From China, it was reported that domestic coal prices are being held at high levels because local supply remains tight due to mine safety inspections. However, power plants have not been aggressive in purchasing because cheap import stocks are still abundant. The market is now waiting for the peak summer electricity consumption season to determine the next price direction. In the coke market, prices are still strengthening, driven by tight coking coal supply due to safety inspections in Shanxi and other major producing regions. However, the price rally is beginning to face headwinds as steelmakers increasingly resist the rise in coke prices. Steel mill profit margins are shrinking as steel prices do not rise as fast as raw material costs, limiting the room to accept further coke price increases. Some market participants believe the next round of coke price hikes will be far more difficult than the previous one. In the thermal coal market, prices remain restrained amid still-weak demand. The thermal coal market at China’s major ports tended to be stable mid-week. Offer prices remain high because mine-mouth coal prices are still elevated due to strict safety inspections and limited supply. Traders are reluctant to lower prices because the cost of procuring coal from mines remains expensive. On the other hand, buyers, especially power plants, are still cautious in making purchases because the peak summer electricity consumption season has not fully begun. Rainfall in several regions of China has reduced the need for coal-fired power plants. The abundant availability of cheaper imported coal is also suppressing interest in buying domestic coal. Meanwhile, the Indonesian government has signalled a relaxation of national coal production in 2026. The Ministry of Energy and Mineral Resources (ESDM) has confirmed that next year’s production quota will be set above 600 million tonnes, in line with high domestic needs and the upward trend in global coal prices. This step is being taken to ensure the adequacy of national energy supply, particularly for the electricity sector. Based on ESDM data, coal demand for state electricity company PLN’s power plants in 2026 is estimated to reach 154 million tonnes. However, to date, the supply secured under contract has only reached around 134 million tonnes. This means there is still a supply shortfall of about 20 million tonnes that the government is seeking to meet through adjustments to coal production and distribution policies. The quota policy above 600 million tonnes is an indication that the government is opening additional production space to maintain national energy security while anticipating rising market demand.