en.Wedoany.com Reported - Indonesia's domestic coal demand has hit a monthly record high, even as the government attempts to limit domestic coal production. The latest data shows that growing demand from smelters, power generation, and downstream processing industries is tightening the domestic market and reshaping the country's coal flow patterns.

Data indicates that Indonesia is experiencing its highest monthly coal unloading volume on record, suggesting that domestic coal demand remains robust and has not weakened due to the government's production reduction efforts.

According to data from commodity research firm DBX Commodities, Indonesia's coal unloading volume reached 3.203 million tons in May 2026, setting a new historical record and exceeding the five-year seasonal average by 163%.

Alongside the rapid expansion of domestic demand, Jakarta is attempting to cap coal production at around 600 million tons in 2026, a target approximately 24% lower than last year's production level, aimed at supporting coal prices after a period of oversupply.

Unable to secure sufficient local supply, coal consumers are increasingly competing for available resources. Growing industrial activity continues to drive up consumption. A key driver is Indonesia's downstream mineral strategy. The nickel ore export ban implemented in 2020 triggered significant investment in domestic smelting capacity, which in turn has generated strong demand for coal. Nickel and metal processing operations currently account for about 31% of domestic coal consumption. Continued industrial expansion and growth in the power sector are expected to bring additional demand.

This has created a paradoxical situation: authorities are trying to limit supply to support export prices, while rising domestic demand is driving coal circulation in the local market at record levels. The latest data highlights the increasingly important role of Indonesia's industrial sector in shaping coal demand trends and suggests that domestic consumption could become a more critical variable for the country's coal market in the coming years.

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