The news continues to be bleak for the global coal sector. With an announcement last Friday of a moratorium on new coal licensing across the U.S. now hitting the industry.
At the same time however, stalwarts of the industry continue to soldier on. With BHP Billiton saying this week that it produced 87,000 tonnes of metallurgical coal from its recently-commissioned Haju mine in Kalimantan during the fourth quarter of 2015. Related: OPEC Still Sees Oil Markets Balancing This Year
And there may a sliver of hope for coal prices now coming from that part of the world. With authorities in world-leading coal exporter Indonesia this week announcing a substantial fall in the nation’s output during the past year.
As expected, Indonesia’s 2015 coal production came in well below target — at 392 million tonnes for the year.
That was less than the government’s previous projections of 425 million tonnes. Showing that production is declining quicker than authorities had expected under the weight of low prices.
All told, 2015 output was down 14.4 percent from the 458 million tonnes Indonesia produced in 2014. Related: $329 Billion Invested in Clean Energy in 2015
And that wasn’t the only notable number that came out of Indonesia’s year-end coal stats. With the country also posting a bigger-than-expected rise in domestic consumption.
The Ministry of Energy and Mineral Resources noted that coal use in Indonesia rose 14.8 percent to 87.43 million tonnes. Well in excess of the 70 million tonnes the government had projected for local use.
That increase, along with the fall in production, led total exports to decline by 87 million tonnes during the year — to 295 million tonnes, representing a 23 percent fall. Here’s the chart:
Related: Oman Offers to Slash Oil Production If OPEC Follows Suit
This represents the lowest level of exports for Indonesia since 2011 — when the nation was just starting a major ramp-up of its coal production on the back of rising global prices.
It’s probably not going to move the dial just yet. But the market is rebalancing. Watch to see if output falls further during the opening quarters of 2016 — which could take exports back toward levels that prevailed prior to the recent boom.
Here’s to levelling out
By Dave Forest
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