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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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Wednesday, 26 May 21
NEW POWER AND ENERGY MASTER PLAN MUST BE DESIGNED IN BANGLADESH'S BEST INTERESTS, NOT JAPAN'S - IEEFA
JICA must deliver a low or zero emissions plan as promised, not fund Matarbari 2 coal plant
Clear understandings from the Bangladesh ...
Tuesday, 25 May 21
KOREA SOUTHERN POWER INVITED BIDS FOR 870,000 MT OF MIN 5300 NCV COAL FOR 2021 TO 2023.
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 870,000 MT of Min 5,300 kcal/kg NCV coal for Augu ...
Tuesday, 25 May 21
CHINA’S COAL OUTPUT RISES IN FIRST FOUR MONTHS - XINHUA
China’s raw coal output rose 11.1 percent year on year to 1.29 billion tonnes in the first four months of 2021, official data showed.
&nb ...
Tuesday, 25 May 21
MARINE SHIPPERS BULK UP: ANOTHER GAME OF CHICKEN IN THE WORKS? - THE KOREA TIMES
Global shipping companies have been placing orders for large ships, with many anticipating further increased competition within the next three year ...
Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent r ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- The University of Queensland
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
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