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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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Monday, 08 March 21
MARCH 2021 INDONESIA COAL PRICE REFERENCE SETTLES LOWER
COALspot.com: The Indonesia coal price reference for March 2021 settles at US$ 84.49 per ton FOB vessel.
The Indonesia coal pr ...
Saturday, 06 March 21
AUSTRALIAN COAL: SOME WEAKNESS COULD MATERIALIZE AFTER THE WINTER - ING
Newcastle coal prices remain well supported for now, however as we move out of the winter months we would expect prices to come under pressure. Mea ...
Saturday, 06 March 21
ASIA SEABORNE COAL PRICES START TO RETREAT, CHINA-AUSTRALIA DISPUTE LINGERS - REUTERS
There are signs that the price and demand surge for coal during the recent colder-than-expected winter across North Asia is starting to ease, even ...
Thursday, 04 March 21
HEAD OF JBIC SAYS THE JAPANESE BANK WILL NOT FUND NEW COAL PLANT DEVELOPMENT - NHK NEWS
The governor of the Japan Bank for International Cooperation has said that the government-owned financial institution will stop funding new coal-fi ...
Wednesday, 03 March 21
MARKET INSIGHT - INTERMODAL
Following the recent rally to multi year highs of metal-based commodities, amid an unprecedented global economic stimulus, discussions of an emergi ...
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- Deloitte Consulting - India
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- Romanian Commodities Exchange
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- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
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- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
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- Parry Sugars Refinery, India
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- Indian Energy Exchange, India
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- Directorate General of MIneral and Coal - Indonesia
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- Trasteel International SA, Italy
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- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Minerals Council of Australia
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
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- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
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- Larsen & Toubro Limited - India
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- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
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- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
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- Bangladesh Power Developement Board
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- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- The University of Queensland
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
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- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
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- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
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- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Xindia Steels Limited - India
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- India Bulls Power Limited - India
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