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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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Friday, 30 April 21
HIGH-SULPHUR FUEL OIL SALES REBOUND AFTER PRE-IMO 2020 - BIMCO
HSFO sales are up 47.2% from Q1 2020, reaching 3.1m tonnes. This is however still less than a third of high-sulphur fuel sales in Q1 2019, before t ...
Wednesday, 28 April 21
MARKET INSIGHT - INTERMODAL
Despite the current challenges as a result of the global pandemic, 2021 is turning out to be a landmark year for the iron ore market with spot pric ...
Monday, 26 April 21
CHINA TO FURTHER CUT COAL USE IN 2021 - XINHUA
China aims to reduce the share of coal in its energy mix to less than 56% this year, according to a guideline released by the National Energy Admin ...
Wednesday, 21 April 21
COAL FINANCING COSTS HAVE SURGED IN PAST 10 YEARS - UNIVERSITY OF OXFORD - THE GUARDIAN
Coal financing costs have surged over the last decade as investors demand returns four times as high as the payoff required from renewable energy p ...
Tuesday, 20 April 21
US DOLLAR LIBOR TRANSITION IN ASSET FINANCE - WHERE ARE WE NOW? - WATSON FARLEY & WILLIAMS
Since our last article, there has been a raft of regulatory and market body announcements relating to the transition away from LIBOR and the follow ...
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- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Australian Coal Association
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Sical Logistics Limited - India
- Minerals Council of Australia
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- The University of Queensland
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
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