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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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Wednesday, 10 February 21
FY21 COAL DEMAND MAY BE LOWER THAN PREVIOUSLY ESTIMATED DUE TO COVID-19: PRALHAD JOSHI - PTI
Coal demand in the current fiscal may be lower than the initial estimate of 1,085 million tonnes (MT) due to the impact of COVID-19, Parliament was ...
Wednesday, 10 February 21
MARKET INSIGHT - INTERMODAL
We have just entered February, Chinese New Year holidays are about to start and the SnP market for bulkers is so hot as every seller would dream of ...
Tuesday, 09 February 21
SWITCHING COAL PLANTS TO PLN'S BIOMASS COFIRING PLAN IS NO MAGIC BULLET - IEEFA
Implementation risks for Indonesia PLN's switch from coal to biomass cofiring
PLN’s biomass cofiring plan will require not ...
Friday, 05 February 21
THE INDONESIA COAL PRICE REFERENCE FOR FEBRUARY 2021 SETTLES AT US$ 87.79 PER TON FOB VESSEL
COALspot.com: The Indonesia coal price reference for February 2021 settles at US$ 87.79 per ton FOB vessel. The February reference price is the hig ...
Thursday, 04 February 21
WHY BANGLADESH SHOULDN’T COUNT ON A FOSSIL FUEL FUTURE - IEEFA
Around US$50 billion of LNG projects in Asia at risk of cancellation
Two astonishing figures have circulated in the Asian energy sector in the ...
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- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Siam City Cement PLC, Thailand
- Australian Coal Association
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
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