WoodMac principal analyst Shirley Zhang said Indonesia, which was considered a major competitor with Australia for coal exports in the Asian region, was still best placed to meet Chinese seaborne demand surprises, due to its proximity and its competitive low-ash, low-sulphur supply.
"We expect 2018 Indonesian thermal coal production and exports to reach 510 million tonnes and 410Mt, respectively," she said.
"This assumes monthly Chinese imports will remain at an average of 12.7Mt from August to December. All else being equal, an absence of Chinese domestic supply recovery or the lifting of import restrictions this winter could raise prices for high-ash coal and Indonesian supply."
However, Zhang believes the Indonesian government's wish to capitalise on the tightness by approving additional supply might not be able to generate even more export revenue.
"We believe Indonesian miners will be more cautious in making decisions to increase production from current levels," she said.
"In our view, further near-term upside for Indonesian coal exports from their current level is limited, unless there is a strong demand signal from China or even India."