- Indonesian coal shipments rebounded sharply in August, aided by policy changes and stronger regional demand.
- Freight markets show mixed trends: Capesize rates remain firm, Panamax routes softened, while Supramax rates continue climbing.
- Vessel ballaster movements highlight tightening capacity in some regions but oversupply in others, influencing freight dynamics.
After a weak start to 2025, Indonesian thermal coal exports showed signs of recovery. June volumes dipped to a yearly low of 35 million tonnes, but by August shipments surged to nearly 48 million tonnes, surpassing year-ago levels. While first-half exports totaled 236.4 million tonnes, below 263.0 million tonnes in 1H 2024, the August rebound suggests stronger momentum for the second half, according to Breakwave Advisors.
A key policy shift supported the turnaround. In late August, Indonesia removed the requirement for coal and mineral sales to adhere to government benchmark prices, giving exporters flexibility to align with market indices. Taxes and royalties remain benchmark-linked, while September benchmark levels are expected to keep Indonesian coal competitive against Australian and Russian cargoes.
Trade Policy Developments
Indonesia is also strengthening its trade profile. On September 23, the EU–Indonesia Comprehensive Economic Partnership Agreement (CEPA) is set to be signed in Bali. Voyage data shows diversification of coal exports beyond China and India, with the Philippines maintaining steady imports through key ports such as Sual, Limay, Pagbilao, Mariveles, and Davao. This underscores the Philippines’ continued role as a reliable outlet, even as its energy mix gradually shifts toward LNG.
Capesize Market Trends
Capesize freight rates have remained steady, supported by strong miner activity. The Brazil–China (C3) route holds at $24/ton, while Australia–China (C5) remains near $11/ton. Vessel ballaster counts show a declining trend, with South Atlantic nearing 250 and West Australia below 160, pointing to a tighter supply outlook.
Panamax Market Softening
Panamax spot rates have eased on major export routes. East Coast South America (ECSA) to Far East rates fell 3% week-on-week but remain 7% higher month-on-month. The U.S. Gulf–China route dropped 4% weekly but also sits 7% above August levels. Panamax ballaster numbers remain low, with daily loaded volumes from ECSA just under 0.8 million tonnes.
Supramax Market Strength
Supramax freight rates are on a steady upward trend. ECSA to Far East reached $37/tonne, a 10% monthly gain, while USG to Far East climbed 8% to $47/tonne. Vessel ballasters to ECSA increased to just under 130, up from 113 at the end of August, potentially influencing rates in the weeks ahead.
Ballaster Movements by Vessel Class
- Capesize: South Atlantic ballasters fell 6%, while the North Atlantic rose 13%. The Pacific showed improved absorption, with Australasia up 12%.
- Panamax: Ballaster activity remains stronger in the Pacific, with the Indian Ocean showing a 19% increase. South Atlantic also trended higher.
- Supramax: Oversupply persists in the Pacific, with Australasia up 20% and Indian Ocean/South Africa up 39%. The Atlantic also saw gains, with 39% growth in the South and 10% in the North.
- Handysize: Both basins recorded growth, with Far East/NOPAC up 7% and Australasia up 9%. In the Atlantic, North rose 16% and South 7%.
Coal Flows and Tonne-Day Growth
Panamax coal shipments to the Far East showed weaker tonne-day growth compared to recent years. While September began stronger than July, 2025 is unlikely to reach 2023 levels due to earlier weakness in Indonesian coal exports to China. Upcoming government pricing and taxation policies will be key in shaping second-half cargo volumes.
Port Congestion Trends
Atlantic America port congestion has eased to around 900 vessels, down from over 1,000 in 2023–24 and closer to 2022 levels. Estimated port days are now around 11, significantly below the September 2023 peak of 16. In contrast, Far East ports, particularly Tianjin, are experiencing rising congestion pressures.
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Source: Breakwave Advisors
