Korea expects limited impact from Indonesia export ban

The South Korean government has announced that the short-term impact of the Indonesian coal export ban will be limited, at least for January, according to a statement on the energy ministry's website.

The ministry held an emergency meeting on 3 January with five state-owned Kepco utilities and other related participants to assess the impact of the Indonesian coal export ban on the market in January. The meeting note shows that considering utilities' current level of coal stocks and that there are no disruptions in deliveries from other countries, the short-term impact of the Indonesian coal export ban is expected to be limited in South Korea.

Around 55pc of the scheduled cargoes from Indonesia for January have been either loaded or shipped already, although the arrival of the rest of shipments is to be delayed, the announcement said.

South Korea's coal import mix was dominated by Australia-origin coal in 2021, which accounted for a 49pc share. This was followed by a 20pc share for Indonesian coal and 11pc for Russian coal.

Vice-minister Ki-Young Park said that "given that the ban took place in January when South Korean heating demand peaks, a thorough assessment of likely impacts of the export ban is needed to prepare appropriate measures".

He added, "it is necessary to monitor price increases in case of an international competition for coal supply, as well as its impact on the power market balance in China and India".

Indonesia has suspended thermal coal exports for January in order to divert supplies to domestic utilities that are grappling with acute shortages, and to avoid widespread blackouts that could cripple economic activity.

Indonesian authorities are set to review the export ban on 5 January, and could potentially lift the restrictions if state-owned utility PLN is assured supplies of at least 5.1mn t of coal this month.

By Evelyn Lee