INDONESIA may resume its coal exports by the end of the week, a government source has told Lloyd’s List.

State-owned power producer Perusahaan Listrik Negara had already obtained supply commitments of about 7m tonnes from local miners, paving the way for the resumption “soon” of exports, the source said.

An energy ministry spokesman said senior officials reviewed today the domestic supply-demand situation, but did not reach a conclusion, prompting more deliberations.

The government has imposed a total ban on coal exports until the end of January, citing short supply of coal to power producers which could lead to a major power shortage and subsequently affect the country’s economy.

The ministry’s director-general of mineral and coal Ridwan Jamaludin said the ban was introduced on January 1 to replenish the power plants’ stockpile because miners’ supply was below the mandatory level.

Since Indonesia is the world’s largest thermal coal exporter, the ban immediately caused an international ripple effect, with a drop in freight rates on supramax time charter charges and a spike in panamax spot rates.

One analyst estimates dry bulk shipping in general may be adversely affected by Indonesia’s coal export ban.

Ralph Leszczynski, head of research at Banchero Costa, said Indonesian coal accounts for about 10% of all dry bulk shipping demand since the commodity represents about 30% of all dry bulk shipping volumes.

The Southeast Asia country accounts for about 28% of global coal exports, or more than 300m tonnes a year.

The Indonesian Coal Mining Association, which has a membership of 80 producers accounting for about 75% of the industry’s total annual output, called for a resolution of the domestic short supply problem as soon as possible.

“We are committed to resolving the short supply issue and we are working with the government to find and put in place a permanent solution to this problem,” said association executive director Hendra Sinadia. 

He said the industry would like to see a comprehensive solution to the domestic supply shortfall which also involves logistical issues.

“In certain instances, finding vessels to transport coal from source to power plants was difficult,” he said. “In others, certain supply commitments were not complied with due to issues like insufficient coal landing facilities in certain power plants.”

A source familiar with Indonesia’s coal industry cited other culprits in the production-domestic supply imbalance.

Delays in centralised government approvals hamper coal production and transport to users, the source said. The huge disparity in the local price of coal against levels overseas is another major issue.

With domestic coal price capped at $70 per tonne, many producers are keen to sell overseas at up to $200 or more per tonne, the source said.

As a result of the export ban, about 140 bulkers with a total 9.6m dwt remain anchored off Indonesia’s coast as operators await the government’s decision to lift it or not.

Lloyd’s List Intelligence data show that 55 bulkers, with a total of almost 4m dwt and mostly in the supramax to panamax categories, are anchored off the South Kalimantan coal-exporting region.

 A further 25 bulkers with 1.7m dwt are moored around the North Kalimantan region, while the rest are bunched around the East Kalimantan area.

Danish consultancy BullPositions has warned in a research note that if the export ban is fully implemented and if it remains unchanged after a review, “the supramax and panamax segments are likely to see significant impact on short-term activities from Indonesian coal ports as the trade shifts from foreign exports to intra-Indonesian transport.”

Baltic Exchange data show that panamax spot rates have spiked by over 10% in the first trading day of the year to $25,865 per day against the close on December 24.

Supramax rates on the Baltic Exchange dropped 3.5% % to $24,3030 per day, while handysizes fell 4% to $25,322 per day at the close on January 4. 

Rory Simington, principal analyst at Energy research consultancy Wood Mackenzie, said the huge disparity in the local and export prices of thermal coal, coupled with strong Chinese demand late last year, must have prompted miners to defer domestic shipments in favour of increased exports.

Senior Wood Mackenzie analyst Manish Gupta said a total coal export ban seemed unnecessary since the power sector’s domestic coal requirement was in the 9m-10m tonnes range per month against production of 47-51 tonnes a month.

He said out of the 5.1 tonnes required by PLN for January, 3.2 m tonnes had already been secured.