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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, 27 January 21
MARKET INSIGHT - INTERMODAL
As we have entered the era off renewable energies, all industries globally give max effort to minimize their carbon footprint and consequently thei ...
Monday, 25 January 21
ULTRAMAX YET ANOTHER POSITIVE WEEK FOR THE SECTOR, WHICH SAW INCREASED DEMAND ACROSS ALL BASINS - BALTIC BRIEFING
Capesize
The Capesize market rocked and rolled these past few days. But by weeks end little had changed on the Capesize 5TC as it settled down ...
Monday, 25 January 21
NEW LAW IN CALIFORNIA, USA, AFFECTING SHIPOWNERS' LIABILITY FOR OIL POLLUTION - BIMCO
Members are advised that amendments to the so-called Lempert-Keene-Seastrand Oil Spill Prevention and Response Act of 1990 in the State of Californ ...
Monday, 25 January 21
COAL INDIA SAYS GEARED UP TO MEET SURGE IN FUEL DEMAND FROM POWER SECTOR - PTI
State-owned Coal India Ltd on Saturday said that it is well geared to meet any surge in demand for coal from the power sector.
The s ...
Sunday, 24 January 21
GOVT ASSURES COAL INDIA OF 'FULL SUPPORT', STRESSES ON LEARNING 'NEW THINGS' - PTI
Coal Minister Pralhad Joshi assured Coal India of full government support, even as he said the PSU needs to learn “new things” for impr ...
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- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- PTC India Limited - India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Australian Coal Association
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- The Treasury - Australian Government
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
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