Key facts
As the El Niño climate phenomenon continues to intensify, global coal markets face serious challenges. Indonesia's coal industry relies heavily on river transport; drought has lowered river water levels, prompting miners to reduce barge loadings to avoid groundings. This raises transport costs, reduces per-trip volumes, lengthens loading schedules and causes cargo transshipment delays, tightening near-term spot coal supply. Indonesia's H1 2026 coal production was 367 million tonnes, down 4.2% year on year.
Policy and trade
Exports were 232 million tonnes, down 3.2% year on year. At current full-year production plans, H2 output could fall by around 68 million tonnes year on year. In addition, the Indonesian government plans to bring forward its single export channel policy to September 1, and the market has doubts about a smooth transition. August to October is a key observation window, covering both winter restocking by Asian buyers and Indonesia's traditional export peak season.