Indonesia’s Benchmark Coal Price Projected to Fall to $110 by End-2025
Main Takeaways
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JAKARTA, Investortrust.id – Indonesia’s benchmark coal price, or HBA, is forecast to decline to $110 per ton by the end of 2025, a drop from $122 at the close of 2024, as demand from key buyers China and India weakens.
“The coal price index is projected to reach around $110 per ton by the end of 2025,” said Chairman of the Indonesian Mining & Energy Forum (IMEF) Singgih Widagdo, in a statement to Investortrust.id on Saturday, May 31, 2025.
In line with the forecast, the Ministry of Energy and Mineral Resources (ESDM) has set the HBA at $110 per ton for the second half of May 2025, down from $121 in the first half of the month.
China and India Cut Imports Amid Rising Domestic Production
The downward pressure on coal prices stems from Indonesia’s high export dependency on China and India, which together account for around 54% of shipments, according to Widagdo. Both nations are expanding domestic coal output and cutting back on imports.
From January to May 2025, Indonesia’s thermal coal exports fell 12% year-on-year to 188 million tons—the lowest five-month volume in three years, according to Reuters. During this period, China cut its imports by 20 million tons (down 23%), while India reduced its intake by 14%, or 6.5 million tons.
As domestic self-sufficiency in coal becomes a policy priority for both countries, Indonesian exports have struggled to find new markets.
Broader Demand Weakness and Global Price Drops
Beyond China and India, demand from other key markets—including Japan, South Korea, Taiwan, and the Philippines—has also slowed due to subdued industrial activity. By May 2025, eight of Indonesia’s top ten coal export destinations had reduced imports from the previous year.
Concurrently, other major coal producers like Australia, Colombia, South Africa, and Russia have also been lowering their selling prices, pushing many global coal indices to four-year lows.
On Friday, May 30, 2025, the Newcastle coal price, a global benchmark, dropped $0.1 to $100.8 per ton for May contracts, $2.2 to $103.3 for June, and $1.55 to $106 for July.
This marks a more than 20% decline in 2025 alone, far below the five-year high of $439 per ton in September 2022.
Meanwhile, the Rotterdam coal price, the European benchmark, was up $0.2 to $95.9 for May, down $1.75 to $94.55 for June, and down $1.7 to $94.8 for July.
Policy and Geopolitical Factors Amplify Headwinds
The Indonesian coal market is also facing indirect pressure from global trade and macroeconomic shifts. Recently imposed U.S. tariffs are dampening global growth forecasts, particularly in China and India, further reducing commodity demand.
Meanwhile, Russia’s government has enacted emergency support for its coal sector, including tax deferrals and restrictions on executive bonuses and dividends. The International Energy Agency (IEA) reported that Russian coal exports declined 6% last year.
As oversupply meets tepid demand across global markets, Indonesian coal prices are likely to stay suppressed unless new markets or policy shifts intervene.