Indonesian coal producers expect a further margin squeeze

Asosiasi Pertambangan Batubara Indonesia (Indonesian Coal Mining Association) or the APBI-ICMA recently conducted a survey of 59 major coal companies. The survey results were largely in line with our observations following recent discussions with Indonesian coal miners. 

Standard Chartered summarizes the key survey results as follows:

• The top priority of 40% of Indonesia's coal producers is to renegotiate with contractors to tide through another year of depressed prices. 
  
  
• 46% of the producers surveyed have made reducing production a top-three priority in this year's work plan, a significant increase from last year, when few producers felt reducing production was a top priority. 
  
  
• 78% of the participants felt that short-term fuel prices would remain flat or increase, versus 63% who felt that thermal coal prices had bottomed. This likely implies that several coal producers expect a margin squeeze in the near term.