Indonesia coal ban ‘manageable’ for China, but temporary energy headache looms amid Australia dispute

On Saturday, Indonesia banned thermal coal exports in January to prioritise its own domestic supply and to avoid widespread blackouts

China imported 177 million tonnes of Indonesian thermal coal in the first 11 months last year, an increase of 54 per cent compared with the same period in 2020

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In the first 11 months last year, China imported 177 million tonnes of thermal coal from Indonesia, an increase of 54 per cent compared with the same period in 2020, and which accounted for 74 per cent of its total imports, customs data showed. Photo: Reuters

Published: 5:30am, 4 Jan 2022Updated: 12:25pm, 4 Jan 2022

China’s short-term energy supply is under threat from Indonesia’s decision to ban thermal coal exports in January, but any long-term impact is “generally manageable” due to the upcoming Lunar New Year holiday, analysts said.

The Southeast Asian country – the world’s biggest exporter of coal for power generation – on Saturday announced a halt to exports this month to prioritise its own domestic supply and to avoid widespread blackouts.

Due to Beijing’s ongoing trade dispute with Australia, China is increasingly reliant on Indonesian thermal coal, and in the first 11 months last year it imported 177 million tonnes.

This represented an increase of 54 per cent compared with the same period in 2020, and accounted for 74 per cent of China’s total imports, customs data showed.

The coal shortage facing the country in August last year won’t happen again

Du Rui

Import of thermal coal from Australia, meanwhile, dropped by 89 per cent in the first 11 months of last year due to China’s unofficial ban which has been in place since October 2019.

But the impact of the ban on China might be generally manageable, as electricity consumption is expected to drop significantly during the week-long Lunar New Year holiday, which is set to begin on January 31, according to Du Rui, an analyst at Chinese coal information provider sxcoal.com.

“Historical data shows that the domestic electricity consumption in February is the lowest in a year, which is almost equivalent to only half of that of the peak month,” Du said in a report on Monday.