Indonesia Bans Coal Exports, China to Suffer

NTD Newsroom
By NTD Newsroom
January 6, 2022China in Focus

The world’s top thermal coal supplier, Indonesia, has decided to ban exports in January amid domestic shortages. An Indonesian government statement from last Saturday ordered all coal exporters to reserve their stockpiles.

As the biggest buyer of Indonesian coal, China is expected to suffer.

Asian countries including China, India, Japan, and South Korea together bought over 70 percent of Indonesia’s coal exports last year, and China bought the most, according to the world’s leading commodity data analytics, Kpler.

Chinese official statistics say that 60 percent of China’s coal imports for the first 11 months last year came from Indonesia.

Taiwanese economist Wu Chia-lung says the ban will cause international coal prices to surge, and in turn hurt China. Wu says China’s electricity and steel industries will have to bear the cost.

Most of eastern China suffered from power outages last year. Factories were shut down, traffic lights went out, and electricity prices rose. Many believe this had to do with Beijing’s decision to ban Australian coal imports.

It’s now the middle of winter in most of China, and the situation doesn’t seem to get any better. To make sure the skies are blue during the Winter Olympics, Beijing ordered many provinces to use electricity for heating instead of coal. This makes power shortages even worse.

To stimulate power generation, some local authorities raised the prices of electricity by up to 70 percent during peak hours of power consumption.

China in Focus Weekly Newsletter
Find out what's really going on in China
By registering for the newsletter, you agree to the Privacy Policy.