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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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Sunday, 18 April 21
INDONESIA LIKELY TO WITNESS 119 OIL AND GAS PROJECTS STARTS ACROSS VALUE CHAIN BY 2025, SAYS GLOBALDATA
Indonesia is expected to witness 119 oil and gas projects commencing their operations across value chain during 2021-2025, accounting for 6% of the ...
Sunday, 18 April 21
WORLDSTEEL RAISES 2021 STEEL DEMAND GROWTH FORECAST TO 5.8% - WORLDSTEEL
The World Steel Association (worldsteel) today released its Short Range Outlook (SRO) for 2021 and 2022. worldsteel forecasts that steel demand wil ...
Sunday, 18 April 21
CHINA'S Q1 COAL OUTPUT RISES 16% ON STRONG DEMAND FOR WINTER HEATING - REUTERS
China’s coal output rose 16% in the first quarter from the same period last year, bolstered by strong demand for winter heating and robust in ...
Wednesday, 14 April 21
INDIA HAS A RECORD LEVEL OF STOCKPILED COAL DAMPENING NEED FOR NEW DOMESTIC MINES - IEEFA
Proposed coal mining expansions at odds with excess supply
India has stockpiled a record 132 million tonnes of coal – enough t ...
Wednesday, 14 April 21
BANGLADESH NEEDS A RENEWABLES FOCUS, NOT A SWITCH FROM 'COAL TO GAS' - IEEFA
Renewables are cheaper and more sustainable than gas imports, and can provide better energy security in developing nations
The emerg ...
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- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
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