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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, 23 January 21
GOVT PLANNING TO OPEN UP COAL MARKETING TO STREAMLINE PROCESS - THE INDIAN EXPRESS
The government is considering opening up coal marketing, Coal Secretary Anil Kumar Jain said on Thursday. Currently, production by Coal India is al ...
Thursday, 21 January 21
LNG MARKET RIDING HIGH, BUT WILL THE GAINS CONTINUE? - DREWRY
The LNG market started 2021 on a high note with Asian spot prices crossing $30 per MMBtu while LNG shipping rates recorded a high $350k per day due ...
Thursday, 21 January 21
CHINA'S SPOT THERMAL COAL PRICES REFRESH RECORD HIGH - MYSTEEL
Despite the moderate rebound in temperatures across most regions of China after late December’s deep-freeze, thermal coal prices in the count ...
Wednesday, 20 January 21
CORONAVIRUS OUTBREAK IN HEBEI HAS LIMITED IMPACT ON CHINA'S STEEL INDUSTRY - FITCH RATINGS
The recent Covid-19 outbreak in the steel producing hub Hebei will not have material impact on China’s steel industry, Fitch Ratings says.
...
Wednesday, 20 January 21
MARKET INSIGHT - INTERMODAL
While 2020 is finally behind us, its negative impacts are still hovering over the shipping market. That being said, it is still too early to even s ...
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- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- The University of Queensland
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Romanian Commodities Exchange
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Savvy Resources Ltd - HongKong
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- Tamil Nadu electricity Board
- MS Steel International - UAE
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- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
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