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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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Saturday, 27 February 21
CHINA'S BENCHMARK POWER COAL PRICE EDGES DOWN - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Saturday, 27 February 21
FITCH RATINGS REVISES GLOBAL METALS AND MINING PRICE ASSUMPTIONS
Fitch Ratings has revised some of its metals and mining price assumptions as prices for many commodities will benefit in the short term from return ...
Saturday, 27 February 21
MITSUBISHI PULLS OUT OF VINH TAN 3 COAL PROJECT IN VIETNAM - NIKKEI ASIA
Japanese trading house Mitsubishi Corp. decided Thursday to withdraw from the Vinh Tan 3 coal-fired power plant project in Vietnam amid growing int ...
Thursday, 25 February 21
ARE WE ON THE CUSP OF ANOTHER MINING SUPER-CYCLE? - WOOD MACKENZIE
As the first wave of the coronavirus pandemic began to bite, many observers confidently predicted that the end was nigh for global economic activit ...
Thursday, 25 February 21
2020 PROVED TO BE A TRULY TERRIBLE YEAR FOR SEABORNE COAL TRADE - BANCHERO COSTA
Total loadings in the 12 months of 2020 were down -12.7% year-on-year to 1,130 million tonnes, according to vessels tracking data from Refinitiv, s ...
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- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- GMR Energy Limited - India
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Planning Commission, India
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- The University of Queensland
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
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