Indonesia Coal Earnings Recovery to Slow after Strong 1Q

Fitch Ratings-Singapore-09 June 2021: Fitch Ratings expects the recovery in operating and financial performance of Indonesian coal miners and coal contractors to slow during rest of 2021, after a strong showing in 1Q21. We expect some decline in average selling prices (ASP) in the coming months, after they peaked in 1Q21, but ASP should still be 20% higher in 2021 than 2020.

Sales volumes so far in 2021 have been better than we expected, as Indonesian coal prices significantly recovered in 1Q21, averaging 45% higher than in 2020. However, production volumes are likely to remain in line with our expectations, and return to pre-pandemic levels for most coal miners in 2021. Overall coal imports from China were similar to historical trends in January-April 2021.

We expect downside risks to reduce for credits on Negative Outlook, such as PT Indika Energy Tbk (BB-/Negative) and BUMA.

The full report, “Indonesia Coal Earnings Roundup – 1Q21” is available at or by clicking the link above.

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