[SMM Coal Flash] Coal Leads US$25.5 Billion in Strategic Commodity Exports Monitored by DSI

PT Danantara Sumberdaya Indonesia (DSI) CEO Luke Thomas Mahony said Indonesia’s planned coal trade governance framework will not replace the role of private companies in coal trading, with producers and exporters continuing to negotiate contracts, specifications and prices directly with buyers and manage commodity and payment flows. Instead, DSI will focus on increasing transaction transparency and visibility, linking information from initial contracts through final settlement—including pricing formulas, coal quality, premiums and discounts, vessel information and invoices—to identify potential under-invoicing or inappropriate transfer pricing. Mahony stressed that deviations from benchmarks do not automatically indicate irregularities, as legitimate commercial adjustments can reflect differences in coal quality and transaction terms. DSI also plans to establish an industry-representative methodology committee, involving producers, associations, traders and market practitioners, to help determine appropriate reference prices and legitimate adjustments around those benchmarks.

Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has tightened rules on the use of subsidiaries and affiliates in mineral and coal mining services under Ministerial Decree No. 365.K/MB.01/MEM.B/2026. Under the new rules, IUP and IUPK holders must prioritise mining service companies in the areas surrounding their mining operations and cannot use subsidiaries or affiliates without approval from the ESDM Minister. The restriction covers direct shareholding links and common beneficial ownership. Exceptions apply to government-assigned activities, including National Strategic Projects, mineral processing or refining facilities, coal development or utilisation, and meeting domestic mineral and coal requirements.

Global steel flows grew by 1% year-on-year in July 2026, largely driven by surging Chinese and Indian exports. However, shifting trade dynamics are expected in the fourth quarter as the European Union's strict "Melt and Pour" origin tracking mandate takes effect on October 1, 2026. The new regulation will effectively cut off the widespread practice of nations importing lower-cost Chinese crude steel, rerolling it, and selling it into the EU as local material—a shift expected to heavily impact Turkey, which sources roughly 20% of its steel demand from China and sends 28% of its exports to the Mediterranean.