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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, 27 May 21
KOMIPO INVITED BIDS FOR 1.56 MILLION TONS OF BITUMINOUS COAL
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 ...
Thursday, 27 May 21
CHINA POWER DEMAND EXCEEDS PRE-COVID-19 LEVELS; THERMAL OUTPUT STRONG - FITCH RATINGS
Rising Consumption: Total power consumption rose by 21.2% yoy to 1,921.9GWh in 1Q21 due to the fast recovery of China’s economy, after a drop ...
Thursday, 27 May 21
CHINA'S POWER DEMAND EXCEEDS PRE-PANDEMIC LEVELS; RENEWABLES TO DRIVE DEVELOPMENT - FITCH RATINGS
China's power consumption exceeded the pre-Covid-19 levels in 1Q21 due to the country's fast economic recovery, with strong output from the ...
Wednesday, 26 May 21
THE INDONESIA COAL PRICE REFERENCE FOR MAY 2021 SETTLES AT US$ 89.74 PER TON
COALspot.com: The Indonesia coal price reference for May 2021 settles at US$ 89.74 per ton FOB vessel.
The Indonesia coal pric ...
Wednesday, 26 May 21
MARKET INSIGHT - INTERMODAL
Last year crude tankers’ newbuilding contracting activity was devastated by the economic effects of the Covid-19 pandemic and the cloud of un ...
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- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Posco Energy - South Korea
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- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
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- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
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- Antam Resourcindo - Indonesia
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- Altura Mining Limited, Indonesia
- The University of Queensland
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- Ministry of Transport, Egypt
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- Sical Logistics Limited - India
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- Metalloyd Limited - United Kingdom
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- Australian Commodity Traders Exchange
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- Meenaskhi Energy Private Limited - India
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- Star Paper Mills Limited - India
- Indika Energy - Indonesia
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
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- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
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- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
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- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
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- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
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- Economic Council, Georgia
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- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
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- Price Waterhouse Coopers - Russia
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- Simpson Spence & Young - Indonesia
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- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
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- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
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- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
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