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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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Thursday, 10 June 21
INDONESIA COAL EARNINGS RECOVERY TO SLOW AFTER STRONG 1Q - FITCH RATINGS
Fitch Ratings expects the recovery in operating and financial performance of Indonesian coal miners and coal contractors to slow during rest of 202 ...
Thursday, 10 June 21
U.S. COAL PRODUCTION TO TOTAL 600 MMST IN 2021, 11% MORE THAN IN 2020 - EIA
EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020.
The increase is dri ...
Wednesday, 09 June 21
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
The In-Person Maritime Event
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
culminates successfully in Dubai
Press Release: ...
Wednesday, 09 June 21
MARKET INSIGHT - INTERMODAL
“Counter cyclical investments.” usually take place by investing in a “bad” market at the point that ensures that the acquir ...
Saturday, 05 June 21
KOMIPO INVITED 5600 NAR COAL OFFERS FOR THREE YEARS SUPPLY; 520,000 MT PER YEAR
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
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- TNB Fuel Sdn Bhd - Malaysia
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- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
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- GMR Energy Limited - India
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- SMC Global Power, Philippines
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- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
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- The University of Queensland
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- OPG Power Generation Pvt Ltd - India
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- Semirara Mining and Power Corporation, Philippines
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- Indian Energy Exchange, India
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- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
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- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Minerals Council of Australia
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- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Romanian Commodities Exchange
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- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
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- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
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- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Economic Council, Georgia
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- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
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- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
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- Singapore Mercantile Exchange
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- Orica Mining Services - Indonesia
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- Kobexindo Tractors - Indoneisa
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- Bukit Makmur.PT - Indonesia
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- Chamber of Mines of South Africa
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- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
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- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Marubeni Corporation - India
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- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
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- Thiess Contractors Indonesia
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- Toyota Tsusho Corporation, Japan
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- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
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- Attock Cement Pakistan Limited
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- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
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