China, the world's largest energy consumer, saw its coal imports decline in the first month of 2016. Imports of coal into China fell 9.2 percent to 15.9 million tons in January 2016. Meanwhile, India (one of the world's top coal consumers) is boosting domestic production of coal in order to reduce reliance on imports. Declining coal demand from China and India are a major cause of continuously falling coal prices.

The only cause for some optimism is that Colombia announced its coal production in 2015 fell 3.5 percent (y/y) to 85.5 million tons, hence slightly relieving the global supply glut.

Further Reading: Overview of Indonesia's Coal Industry

When global prices will rise significantly again (if that is a possibility at all) remains unclear. For sure, it seems highly unlikely for coal prices to rise when crude oil and gas prices remain as low as they are today. Meanwhile, Europe and the USA are also making advances with renewable energy sources. However, for the moment renewable energy will not yet be a major threat to coal, particularly as coal-fired power plants are still being constructed in the Asian region.

Indonesian Production, Export, Consumption & Price of Coal:

  2007 2008 2009 2010 2011 2012 2013 2014 2015
Production
(in million tons)
 217  240  254  275  353  412  474  458  392
Export
(in million tons)
 163  191  198  210  287  345  402  382  295
Domestic
(in million tons)
  61   49   56   65   66   67   72   76   87
Price (HBA)
(in USD/ton)
  n.a   n.a  70.7  91.7 118.4  95.5  82.9  72.6  60.1

Sources: Indonesian Coal Mining Association (APBI) & Ministry of Energy and Mineral Resources

Indonesian Government's Benchmark Thermal Coal Price (HBA):

Month    2012    2013    2014    2015
   2016
January   109.29    87.55    81.90    63.84    53.20
February   111.58    88.35    80.44    62.92    50.92
March   112.87    90.09    77.01    67.76
April   105.61    88.56    74.81    64.48
May   102.12    85.33    73.60    61.08
June    96.65    84.87    73.64    59.59
July    87.56    81.69    72.45    59.16
August    84.65    76.70    70.29    59.14
September    86.21    76.89    69.69    58.21
October    86.04    76.61    67.26    57.39
November    81.44    78.13    65.70    54.43
December    81.75    80.31    69.23    53.51

in USD/ton
Source: Ministry of Energy and Mineral Resources

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