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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, 12 March 21
INDIA SHOULD FOCUS ON REDUCING COAL POWER GENERATION INSTEAD OF CAPACITY - IEEFA
Nearly half of existing coal power in India is more expensive than new renewable power
To get to its ambitious climate targets, Indi ...
Friday, 12 March 21
BATTERIES ARE REPLACING COAL NOT GAS - IEEFA
No amount of government subsidies can halt gas’s decline
Batteries are replacing coal not gas.
Today the early ...
Friday, 12 March 21
RENEWABLES SHOULD BE FOCUS OF VIETNAM’S DRAFT PDP8, NOT COAL AND GAS - IEEFA
Evidence was clear to inform the next stage of Vietnam’s power development
Vietnam’s recently published draft power deve ...
Thursday, 11 March 21
U.S. TO PRODUCE 581 MMST IN 2021, UP 8% FROM 2020 - EIA
EIA expects U.S. coal production to total 581 MMst in 2021, 42 MMst (8%) more than in 2020. In 2022, EIA expects coal production to rise by a furth ...
Thursday, 11 March 21
MARKET INSIGHT - INTERMODAL
Assessing the ship repair sector during the first months of 2021, we have come across a new era in which Owners chose the shipyards to repair their ...
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- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Australian Coal Association
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
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