China and India, the leading thermal coal importers, are significantly reducing their imports from Indonesia in favor of higher-grade coal from other countries. The recent decline in global coal prices has made these energy-dense options more appealing, leading to a noticeable shift in purchasing patterns. Both nations are increasingly favoring coal that offers higher calorific value (CV), which generates more energy per ton, according to industry officials.
Vasudev Pamnani, a director at I-Energy Natural Resources in India, notes that while higher CV coal may come at a higher cost, it provides more energy for each dollar spent. He explains that one million tons of this superior quality coal can effectively replace up to 1.5 million tons of Indonesian coal. In China, medium- and low-calorific thermal coal from Indonesia is facing stiff competition from discounted Russian supplies.
Recent data shows that Indonesia’s thermal coal exports to China have declined by 12.9%, while imports from Mongolia and Australia to China have surged by 44.8% and 3.4%, respectively. Ramli Ahmad, president director of Indonesian miner Ombilin Energi, suggests that the market could shift again if higher-grade coal prices rise due to geopolitical factors. However, lower-CV coal is likely to continue struggling as long as better options remain available.
Mongolian and South African coal exports have gained significant traction in both China and India, with South Africa’s shipments rising by 26.1% in early 2025. In contrast, Indonesian coal supplies have dropped by 14.3%. Despite this, there is potential for Indonesian miners to pivot towards domestic demand, which is expected to account for the largest share of coal output in a decade due to robust demand from local industries, particularly nickel smelters.