Indonesia Coal Exports Drop 23% as Global Demand Hits Record

Indonesia’s coal exports dropped 23% year-on-year in August 2026. It marks the lowest August export volume in five years, even as global coal demand is heading towards a record high. The drop highlights growing supply constraints in the world’s biggest thermal coal exporter.

What is the reason behind the drop in Indonesia’s coal exports?

Moreover, tighter government production quotas and uncertainty over coal policy hit the country’s coal shipments. Strong El Niño conditions have decreased the river water levels which affect barge movements and limit the transportation of coal to export ports.

Indonesia’s coal production outlook weakened. Here’s why?

Notably, Indonesia’s coal production outlook has weakened. The International Energy Agency expects the country’s coal output to fall by nearly 1.5% in 2026, with the government lowering its production target to 641 million tonnes. Discussions related to export taxes, mining permits, revenue-sharing arrangements and changes to export management have added uncertainty for producers and buyers.
At the same time, global coal demand is expected to increase 1.2% in 2026 to a record 8.94 billion tonnes.

Some countries are switching from gas to coal for power generation due to encouragement of higher natural gas prices and disruptions to LNG supplies The supply-demand disturbance could keep Indonesia’s coal exports under pressure despite strong international demand. In addition, the country’s position as a major coal exporter means any prolonged production or policy constraints could affect regional coal markets and global supply.