LAUNCESTON, Australia, Oct 11 (Reuters) – Indonesia wants to export more coal in order to earn U.S. dollars to shore up its faltering currency, but the problem is buyers don’t seem to be hearing the message.
Indonesia’s coal exports dropped to 24.8 million tonnes in September, down 12.4 percent from August’s 28.3 million tonnes and 10 percent from 27.6 million tonnes in the same month last year, according to vessel-tracking and port data compiled by Refinitiv.
If the drop isn’t worrying enough, it comes even as the price of lower-grade Indonesian coal is at its widest discount to higher-quality Australian thermal coal.
Indonesia is planning to increase its 2018 output of coal to around 507 million tonnes, up from a previous target of 485 million tonnes. The aim is to convert the additional U.S. dollars from sales of the polluting fuel into rupiah, which has dropped about 12 percent so far this year against the U.S. currency.
In theory, importers should be keen to ramp up purchases of Indonesian coal, as the massive discount to Australian cargoes more than compensates for the lower energy value. The price of thermal coal at Australia’s Newcastle port , as assessed by Argus Media, was $112.25 a tonne in the week ended Oct. 5.
For the rest of this article: https://www.reuters.com/article/column-russell-coal-indonesia/column-indonesia-wants-to-export-more-coal-buyers-ignore-the-call-russell-idUSL4N1WR24R