Rounds of talks between Indonesian government officials and the country’s coal mining sector over the weekend failed to lift the ban on coal exports that was implemented on 1 January. Indonesia’s government is hoping to reach a decision on resuming coal shipments “in the coming days”, its energy minister said on Monday. “In the past week we have done stocktaking and we hope in coming days there will be more clarity so we can have coal security and resume exports,” Reuters quoted energy minister Arifin Tasrif as saying during a meeting with Japan’s industry minister, Koichi Hagiuda.

Commodities analysts say that the month-long ban has the potential to disrupt as much as 30 MMT of the seaborne coal trade. As the ban drags on into its 10th day, coal prices have begun to soar globally while increasingly pessimistic owners and operators of supramax and panamax bulkers open in Asia have begun to search for gainful employment for their ships elsewhere. Dry bulk brokers based in Singapore told TradeWinds that some owners with tonnage in Asia are beginning to accept loadings in Australia, where Asian nations such as South Korea, Japan and the Philippines are said to be looking for alternative coal supplies as their governments put pressure on the Indonesian government to rescind the ban. Reuters reports that Japan and South Korea are among the top destinations for Indonesian coal and together with China and India, they accounted for 73% of its exports in 2021.

Chinese buyers will have to look further afield due to the country’s unofficial ban on Australian coal, although commodities analysts said that for now China is relying on domestic producers and existing stockpiles. Brokers said the market is becoming increasingly pessimistic across the board. “We have lost 10 days’ supply out of Indonesia and even if the ban was to be lifted today, we are still looking at weeks for the backlog to clear,” one broker said. Nervous charterers are also said to be on their phones asking their lawyers and brokers how they can extricate themselves from fixtures for loadings on which force majeure has been declared by suppliers, or where long loading delays are expected.

So far there have been few reports of fixtures being cancelled. Despite the export ban, the loading of vessels continues. “There is nothing to stop ships from loading coal. The problem is that they cannot get sailing permits,” said the managing director of a Jakarta-based coal shipper. “This is leading to disputes over demurrage. It is going to be one big mess,” he added. Meanwhile in Indonesia, government officials continue to drag their heels despite reaching an agreement with the country’s top coal producers at the end of last week to secure enough supply to avert any shortages for domestic power production.

Indonesia requires miners to sell 25% of their production to local power generators at a maximum $70 per tonne, a price that is below the export market price and had led to some producers ignoring the quota. This was blamed for the domestic shortages. Coordinating Minister for Maritime and Investment Affairs, Luhut Pandjaitan, said last Thursday that the domestic supply emergency at state-owned utility Perusahaan Listrik Negara was over, the government was still discussing issues related to the ban. Hendra Sinadia, executive director of Indonesia Coal Miners Association, said on Sunday that one of the issues still being discussed was the limited availability of vessels to transport the coal to power plants. An Indonesian coal shipping source said that with the domestic supply secured, there was no reason for the Indonesian authorities to continue with the export ban while domestic logistics and shipping issues were being resolved. “I think this is a case of the government showing the coal industry who is boss,’ he said.

Under Indonesian cabotage laws only Indonesian-flagged vessels are allowed to transport cargo on domestic voyages, and in the dry-bulk sector these are said to be in short supply. On Monday, Indonesia’s Sea Communications Department under the Ministry of Communication sent out a rallying call to the country’s shipowners asking them to send all available bulkers and barges to load coal for distribution to power stations scattered throughout the vast Indonesian archipelago.