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Monday, 29 June 20
INDIA COAL IMPORT OUTLOOK: WEAK DEMAND, IMPORT SUBSTITUTION, EXPECT 20% YOY DECLINE - GHEE PEH | IEEFA
 For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a nationwide lockdown on 25 March, the country’s daily average power output has been 20% lower than the three-year seasonal average. It estimates power sector coal usage may have fallen by as much as 10mt of NAR 5,000 kcal/kg-equivalent coal to 30mt in April. McCloskey Coal reports that India’s coal stockpile is at 165mt and that nearly half (80mt) is at CIL and other mines. This amount represents 30 to 40 days use. Power plant stocks were at 50mt,which is enough for 29 days. Other indicators, such as imports, domestic coal output, and power and steel output, all point to a large year-on-year decline for India’s coal imports.
Industry observers expect a 20%year-on-yearfall in 2020 India’s coal imports. This is in line with our forecast, but we believe there may be further downside risks. As a result of these, IEEFA expects India to import less Indonesian coal, based on our evaluation of the following four key variables:
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Coal imports: After recording year-on-year growth for January, coal imports experienced year-on-year declines for three months, with March and April down 28% and 29%, respectively.
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Domestic coal production: Coal production from CIL, the largest producer, increased 9.5% year-on-year for the first quarter of 2020.
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Power generation: Thermal power generation fell 1.5% year-on-year in the first quarter of 2020 and total power generation was down 32% year-on-year in April.
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Steel output: From January to April, output was down 20% year-on-year, with April declining 65% year-on-year.
Unlike China, where January to April 2020 coal imports rose, Indian coal imports for the same period were down 18% year-on-year. India’s coal imports have recorded year-on-year declines since February as COIVD-19 disrupted consumption and even the logistics of coal. This is despite average monthly coal benchmark prices falling at least 29% year-on-year over the same period.
According to media reports, CIL’s first quarter of 2020coal production increased 9.5% year-on-year. Although this slowed down to a daily rate of 1.3mt for the first 22 days of April, down 11% year-on-year, these strong gains are bad news for coal exporters to India. The Indian Government has announced measures that are similar to the Chinese Government’s coal import quota. In May, CIL was mandated to replace 100mt (40% of CY2019 coal imports) with domestic non-coking coal for the 2020–21 fiscal year.
For the period January to April2020, India’s total power output was down 7.4% year-on-year and its first quarter 2020 thermal power output was down 1.5% year-on-year. We note that total power output recorded an 8.2% year-on-year decline for March and thermal power output fell 12.9% year-on-year. In April, total power output was down 32.4% year-on-year. Data for thermal power output is not yet available but should also be significantly down, in line with total power output.
These falls would be consistent with the year-on-year decline in coal imports since February and the build-up of stockpiles at CIL and power plants.
India’s steel output acts as an indicator of economic activity. Between January and April, February was the only month that recorded a year-on-year rise in steel output, a modest 1.5%. Steel output recorded year-on-year declines of 13.8% in March and 65.2% in April, due to the full month of lockdown that started on 25 March. Against the backdrop of an increase in domestic coal production in the first quarter of 2020, a build-up of coal stockpiles and a fall in power generation, this level of economic activity presents significant downside risks to India coal imports.
The Indian Government has adopted a policy that supports its domestic coal sector, calling for import reductions. In May 2020, CIL was mandated to replace 100mt of coal (40% of CY 2019 coal imports) with domestic non-coking coal for the 2020–21 fiscal year. CIL’s first quarter 2020 output grew 9.5% year-on-year, presenting a significant risk to Indian coal imports. The risk is greater for Indonesia, because it exports mainly thermal coal. We believe India may have to continue importing coking coal for steel making because its domestic producers mainly supply thermal coal. Industry observers have estimated a 20% year-on-year decline in India’s coal imports. We agree, but also warn that there is a risk of a larger fall.
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. www.ieefa.org
About the Author Ghee Peh
Financial Analyst
Ghee Peh has worked in investment research since 1995, including at Jefferies, BNP Paribas, and UBS. He has covered Asian coal, cement and metal companies.
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Saturday, 26 June 21
KOSPO INVITED BIDS FOR 480,000 MT OF COAL PER ANNUM
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 480,000 MT of NCV 1 Min. 5,600 (Spec 1) /Min. 5,0 ...
Thursday, 24 June 21
FEBRUARY'S INCREASE IN COAL-FIRED ELECTRIC GENERATION REDUCED U.S. COAL STOCKPILES - EIA
Coal stockpiles at U.S. power plants decreased significantly from December 2020 to February 2021, including a draw of nearly 16 million tons in Feb ...
Wednesday, 23 June 21
MARKET INSIGHT - INTERMODAL
The first half of 2021 has brought a very sharp and continued recovery in the dry bulk market and while many where expecting a relatively strong ma ...
Thursday, 17 June 21
2020 PROVED TO BE A TRULY TERRIBLE YEAR FOR GLOBAL SEABORNE COAL TRADE; CHINA'S COAL IMPORTS - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade.
Total global loadings in the 12 months of 2020 were down -12 ...
Thursday, 17 June 21
FITCH RATINGS RAISES SHORT-TERM OIL AND GAS PRICE ASSUMPTIONS
Fitch Ratings has increased its 2021 and 2022 oil price assumptions for the Brent and West Texas Intermediate (WTI) benchmarks due to stronger year ...
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- Australian Coal Association
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Siam City Cement - Thailand
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
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