Coal prices are up 40 per cent, and Indonesia's exports are standing still

Nikkei Asia reports that the price of coal burned in power stations has risen roughly 40 per cent since the start of 2026. The reason is gas. Natural gas has become expensive, so power companies around the world are feeding their plants coal instead of LNG, which is natural gas chilled into a liquid so it can be loaded onto ships. That switch has pushed coal demand to record levels.

Indonesia sends more power-station coal abroad than any other country, so a rally like this should read as good news here. Nikkei says Indonesian exports have stagnated instead. The causes it gives are tighter government control over miners and domestic supply obligations, the rules that require a miner to sell a share of its output inside Indonesia, at a set price, before it can ship the rest overseas. Australian producers are working under their own restrictions. Buyers are no longer sure how much coal will actually leave either country, and that uncertainty is itself part of what is pushing the world price up.

The trade-off here is not hidden, and it is not simple. Coal kept at home is coal that keeps power plants running and electricity tariffs steady, which counts for a lot in a year when fuel has been short and prices at the pump have climbed. Coal sold abroad is foreign currency, company profit and government royalties, and the budget has been under strain for months. The longer the rally runs without export volumes moving, the wider that gap gets.

Why it matters

If your work is in a coal district in East Kalimantan or South Sumatra, a global price boom your employer cannot fully sell into is a boom you will not see in your pay. What you will notice is at home, because the same rules holding exports back are what keep coal cheap for Indonesian power stations, and so part of the reason your electricity bill has not jumped this year. Watch for any move to loosen the domestic quota, since that is the point where the two halves of this story start pulling against each other.