Coal exports from Indonesia will be restrained this year, which could frustrate a plan by the government to ease a burgeoning trade deficit while keeping prices elevated, according to an industry group.
Producers in the world’s largest shipper face an order backlog of 18 months as they aren’t able to get hold of additional mining equipment, Pandu Sjahrir, chairman of the Indonesian Coal Mining Association, said in an interview in Jakarta. The slow rampup in supply will probably keep coal prices buttressed at about $100 a metric ton through the end of next year, he said.
“Supply restriction is still quite real,” Sjahrir, who’s also finance director at miner PT Toba Bara Sejahtra, said on Monday. “It’ll be the end of 2019 before they can fulfill some of their orders today.”
That’s bad news for President Joko Widodo’s government, which is trying to rein in a current-account deficit and bolster the currency that’s tumbled to the weakest level since the 1997-98 Asian financial crisis.
A rally in coal prices and the abundant reserves in Indonesia makes the commodity an ideal target in the government’s drive to boost exports and shore up dollar earnings.
For the rest of this article: https://www.bloomberg.com/news/articles/2018-09-18/coal-exports-from-top-shipper-hobbled-as-miners-face-constraints