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In recent years, due to a persistent oversupply in the market, the coal industry has been in a declining state. From producers to traders, faced with persistently low international coal prices, everyone is praying that things won’t get any worse. However, at the annual Pan-Asian Coal Conference held recently in Bali, an iconic tourist destination in Indonesia, coal producers and traders from Asia showed optimism for the first time since 2012. The industry sees hope for a recovery. According to Reuters, as of the end of May, the Australian Newcastle Index, which serves as a benchmark for coal prices in Asia, had risen by about 3.9% so far this year, reaching $52.59 per ton. Although current international coal prices are only slightly over one-fourth of the historical high of $194.79 per ton recorded before the global economic recession in 2008, this represents a halt to the continuous decline that had persisted for nearly 5 years. All participants agreed that the previous sharp drop in coal prices was mainly due to misjudgments in the market, which led to a persistent surplus of supply while demand failed to keep up. Now, things are changing, and the coal market is gradually approaching supply-demand balance. Clayde Russell, an analyst at Reuters, noted that although overall the market is still in a state of supply exceeding demand, this is not the case for all types of coal; for example, low-sulfur, low-ash coal with a calorific value of over 5,800 kcal/kg remains in high demand in the market. Furthermore, both production and exports in the major coal-producing countries have declined, with only a few coal-exporting countries seeing an increase in supply. According to Fabio Gabrielli, head of commodity strategy at Mercuria Energy Trading, Indonesia will see its exports decrease by 22 million tons this year compared to last year, while the United States will see a reduction of around 10 million tons in its exports. Among all the major coal exporting countries, only Colombia and Russia will see a slight increase in exports, by 2 million tons and 3 million tons respectively. Gabrielli said this will alleviate the current situation of excess market supply to some extent. However, Gabrielli also admitted that on the demand side, imports from China and India are expected to decrease by 4 million tons and 10 million tons respectively. Among them, China’s imports this year are also likely to follow last year’s pattern, declining by around 30%. Therefore, \"it is still difficult to determine market equilibrium when both supply and demand are decreasing.\" ”He said. Indonesia’s production and exports have both declined. In the global coal market, Indonesia, as a major exporter of thermal coal, is experiencing changes that are particularly noteworthy recently. According to Reuters, both the production and exports of coal in Indonesia are declining, and the country has also stated that its coal production will continue to fall in the future. At the end of May, Indonesia’s Ministry of Coal and Mining said that due to a number of small coal mines in the country that reduced their production as a result of low commodity prices, coal production in Indonesia is expected to decline slightly in 2017. Reuters noted that as a major player in global coal production and exports, a decline in Indonesia’s output can help alleviate low coal prices. “It’s a natural choice. Those inefficient small coal mines cannot withstand long-term low prices and will inevitably be phased out. ”Bambang Gatot, a member of Indonesia’s Ministry of Coal and Mining*, said in an interview. He also said that the small coal mines that remain out of necessity will “face considerable obstacles” due to the difficulty in selling the coal they produce. Gatot revealed that this year Indonesia’s coal production will reach 419 million tons, while next year it will drop to 409 million tons. In January this year, Indonesia **released figures showing that last year the country produced only 392 million tons of coal in total. According to data provided by Gabrielli, the total global trade in thermal coal already decreased by 45 million tons last year, and it is expected to drop by another 30 million tons this year. Driven by this, Indonesia’s coal exports will also inevitably decrease. In addition, Indonesia has also set an ambitious domestic electricity production target of 35 gigawatts; a 20 gigawatt coal-fired power plant is already under construction, and naturally, a portion of its output will be allocated for export in the future. Meanwhile, India’s demand for Indonesian coal is also declining. It is reported that India is currently seeking to purchase high-quality coal at low prices from countries such as Australia, South Africa, and Colombia. Furthermore, an official from Indonesia’s **electricity company revealed that the demand for coal by power plants in Indonesia is on the rise, with an expected increase of 13% this year, reaching 80 million tons ； It will grow by 7.5% next year, reaching 86 million tons. Southeast Asia will drive the growth in demand. Gerry Feerick, Energy Director at Noble Indonesia, noted that although India, a key market on the demand side, is increasing its domestic production and thus faces the risk of lower imports this year, coal demand across Southeast Asia is expected to increase significantly, which will help balance the market. “With tighter supply and rising extraction costs driving prices, the market is expected to enter a new cycle between this year and next. ”He said. Rosell pointed out that, in fact, optimism in the coal industry regarding Southeast Asia has persisted for several years. The industry generally believes that demand in emerging Southeast Asian markets such as Malaysia and the Philippines will remain strong, while demand from traditional buyers such as China, India, Japan, and South Korea is trending toward stability. However, Rosell emphasized that although the supply and demand balance in the coal industry is slowly recovering, there are no clear signs that prices will rise sharply at current levels. He said that once the price at Port Newcastle in Australia exceeds 60 dollars per ton, two outcomes will arise: first, it will attract more American coal into the maritime coal market ； Secondly, it is to stimulate growth in domestic coal production in China. “The long winter for the coal industry may be coming to an end, but a true thaw could still take a considerable amount of time. ”He said.