Bank Mandiri Economists Bring Bad News, Indonesia's Coal Exports May Be Blocked By Australia Because Indonesia Is Too Dependent On China
JAKARTA - PT Bank Mandiri Tbk Chief Economist Andry Asmoro estimates that Indonesia's coal exports have the potential to be depressed due to the expansion carried out by neighboring Australia for the 'black gold' commodity.
According to him, Australia is quite aggressive in developing its traditional market which is also Indonesia's trading partner.
"Competition will be tougher with Australian coal in the Indian market because Australia's penetration in the Indian market is more intensive," he said in an official statement, Friday, August 27.
Andry added, in addition to the Kangaroo country factor, Indonesia's coal exports in the global market are also very likely to be affected by other reasons.
"The dependence on China's coal demand will make Indonesia's coal export performance very vulnerable to China's coal import policy," he stressed.
In addition to these two countries, Indonesian coal is also targeting a number of countries in East Asia, such as Japan and South Korea. Unfortunately, in the period of June 2021, demand from the pair of trading partners contracted by minus 45 percent and minus 25.92 percent year-on-year (yoy) respectively. It is suspected that the pandemic condition was the cause of the drop in domestic coal shipments.
To note, Indonesia's coal exports for the period January to June 2021 grew 2.4 percent yoy with a total of 213.3 million tons.
Meanwhile, for overseas coal sales in June 2021, it is stated at 36.7 million tons, down from May 2021 which was 37.7 million tons.
"We estimate the average price of coal in 2021 to be 104.3 US dollars per tonne. In the future, we are of the view that prices will correct for several reasons. First, China's domestic coal stock is slowly increasing. Second, tapering in the United States is predicted to occur more quickly starting at the end of 2021, which will suppress US dollar liquidity and reduce the speculative effect on the market,” concluded Andry.