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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, 13 January 21
CHINA THERMAL GENCO PROFITS FACE PRESSURE AMID POWER SHORTAGES - FITHCH WIRE
High coal and gas prices will put near-term pressure on margins for thermal power generators in China, says Fitch Ratings. However, the power short ...
Wednesday, 13 January 21
COAL TO BE BIGGEST CONTRIBUTOR TO INDIA'S $5 TRILLION ECONOMY: AMIT SHAH - BUSINESS STANDARD
The Centre on Monday awarded the letter of allocation to successful bidders of coal mines under the commercial auction held during October-November ...
Monday, 11 January 21
MUTED COAL RECOVERY IN 2021 - BALTIC EXCHANGE
Coal demand is expected to rebound in 2021
Medium-term outlook is less favourable although demand declines are expected to be subtle ...
Sunday, 10 January 21
KOREAN GENCOS INVITED BIDS FOR TOTAL 880,000 TONS OF COAL FOR MARCH 2021 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), on behalf of EWP, KOSPO, KOSEP and KOWEPO issued an international tender for total 880 ...
Friday, 08 January 21
INDIA COULD COMPETE AGAINST CHINA IN SOLAR MODULE PRODUCTION WITH THE RIGHT GOVERNMENT SUPPORT - IEEFA
The focus should be on helping manufacturers become globally competitive
Although one of the top 10 solar module producers in the world, India ...
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- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Australian Coal Association
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
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