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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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Tuesday, 01 June 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.02 PCT - XINHUA
China Taiyuan coal transaction price index stood at 160.06 points Monday, down 0.02 percent week on week.
The index, released by Chi ...
Tuesday, 01 June 21
BUMA PRODUCED 11.4 MILLION TONNES OF COAL IN 4Q 2020, 5% LOWER COMPARED TO 12.2 MILLION TONNES IN 4Q 2019
PT Delta Dunia Makmur Tbk. presents its newsletter with consolidated financial and operating results that include its primary and wholly-owne ...
Sunday, 30 May 21
PAKISTAN IS PLANNING TO END COAL IMPORTS, WORSENING OUTLOOK FOR SOUTH AFRICAN COAL - IEEFA
The growing and irreversible risks being faced by South African coal exporters
As Thungela Resources’ CEO attempts to talk up ...
Sunday, 30 May 21
G7 COAL FINANCE EXIT AND WHY IT MATTERS FOR INDIA - IEEFA
While India doesn’t rely on export credit finance to fund new coal plants, there are material implications
The commitment by the Group o ...
Saturday, 29 May 21
SKULD’S IMO 2020 SULPHUR CAP EXPERIENCE
More than a year has passed since the International Maritime Organization (IMO) mandate for the 0.50% sulphur cap for marine fuel (MARPOL Annex VI) ...
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- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- The University of Queensland
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
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