Collective surge! Major external positive news completely ignites the coal sector!

The coal sector is booming!

On February 4th, coal stocks surged, with Yankuang Energy, China Coal Energy, Shaanxi Black Cat, Jinmei Energy, JinKong Coal, and Yunmei Energy hitting the daily limit up. Lu’an Environmental Energy, Shanxi Coking, Baotailong, Shanxi International Coal, Jinjie Energy, and Dayou Energy also saw significant gains. The Coal ETF temporarily surged over 7%, leading the Dividend Index to rally more than 2%. So, what exactly happened?

According to recent news, the surge may be related to a message from Indonesia. Media reports indicate that the Indonesian government has proposed a significant production cut, and domestic miners have suspended spot coal exports. Data shows that China is Indonesia’s largest importer (importing 242 million tons in 2024, accounting for 42.73% of its exports). The suspension of exports will impact 5.3% of China’s thermal coal supply, increasing inventory pressure at power plants along the southeastern coast. Meanwhile, there are also reports of rising coal prices domestically.

Positive News for Coal

According to reports, Indonesian mining officials stated on Tuesday that due to the government’s large-scale production reduction plan, the country’s miners have suspended spot coal exports. Last month, Indonesia issued production quotas to major miners that are 40% to 70% lower than 2025 levels, as part of the country’s plan to boost coal prices.

In a statement last Saturday (February 1st), the Indonesian Coal Association said that the production quotas approved in the annual work plan are far below last year’s tonnage. Some mining companies’ reductions range from 40% to 70%. If production drops below sustainable levels, some miners may be forced to cease operations. As the world’s largest coal exporter, Indonesia previously announced plans to cut annual coal production to about 600 million tons to support coal prices.

Additionally, the country plans to impose export surcharges on coal, which will further weaken industry profitability. The association has called on the government to reassess the quota reduction plan and consider the actual operational feasibility of coal mines, warning that such measures could lead to large-scale layoffs and loan defaults among mining companies.

As the world’s largest thermal coal exporter (accounting for over 25% of global trade), Indonesia’s suspension of exports will tighten supply and push up international coal prices. Analysts believe buyers may turn to Russia, Australia, and other suppliers, but short-term gaps will be difficult to fill. China is Indonesia’s largest importer (importing 242 million tons in 2024, accounting for 42.73% of its exports), so the export suspension will impact China’s thermal coal supply by 5.3%.

Furthermore, an investor interaction platform for the listed power company Jiantou Energy also posted news about rising coal prices. On February 2nd, Jiantou Energy responded to investor questions on the platform, stating that the main reason for the quarter-over-quarter decline in net profit in Q4 was the continuous rise in coal market prices since the end of Q3 2025, which increased the company’s fuel costs.

Indonesia Becomes the Biggest Variable in Commodities

Looking at recent policy trends over the past six months, Indonesia seems to have become the biggest variable in the supply side of the commodities market.

In mid-December last year, Indonesia’s Minister of Energy and Mineral Resources, Bahlil Lahadalia, pledged to cut production, triggering a rebound in nickel prices. An official from Indonesia’s Ministry of Energy confirmed on January 14th that the country’s annual mining permit volume for this year will be reduced from 379 million wet tons in 2025 to between 250 million and 260 million wet tons.

As the situation developed, Goldman Sachs and Macquarie raised their nickel price forecasts for 2026 this Tuesday, citing signals from Indonesia to limit output, which is expected to tighten ore supply.

Goldman Sachs raised its 2026 nickel price forecast from $14,800 per ton to $17,200. Goldman stated that as ore supply tightens, the market could see prices reach around $18,700 per ton by the second quarter of 2026.

Macquarie increased its forecast for the 2026 London Metal Exchange nickel average price from $15,000 per ton to $17,750 per ton. Macquarie pointed out that the net effect of Indonesia’s tightening supply policy revised its global nickel market balance forecast from a previous surplus of 250,000 tons to a surplus of 90,000 tons.

(Source: Securities Times)