Coal Sector Outlook Remains Bleak as Production Declines
Executive Summary
Key insights and market outlook
The Indonesian coal industry faces continued challenges with predicted production decline of 11% to 739.5 million tons in 2025, falling short of government targets. Coal prices are expected to remain between US$100-US$130 per ton, creating negative sentiment. This downturn affects not only producers but also mining contractor companies.
Deep Dive Analysis
Coal Sector Faces Continued Downturn as Production Declines
Production Challenges and Price Pressures
The Indonesian coal industry is experiencing significant challenges as national coal production is predicted to decline by 11% year-on-year to 739.5 million tons in 2025. This forecast falls substantially short of the target set in the Rencana Kerja dan Anggaran Biaya (RKAB). The situation is expected to worsen in 2026 with production potentially dropping below 700 million tons.
Market Sentiment and Price Trends
The negative trend in production is compounded by coal prices that are trending downward, hovering between US$100-US$130 per ton. This price range creates a strong negative sentiment in the market, affecting not only coal producers but also companies operating in the mining contractor services sector.
Impact on Related Sectors
The downturn in the coal industry has broader implications for related sectors. Mining contractor companies are particularly affected as their business is closely tied to the performance of coal producers. Analysts warn that this could lead to a challenging environment for companies operating in this space.
Source References
Story Info
Topics Covered
Key Events
Coal Production Decline Prediction
Coal Price Trend Analysis