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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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Tuesday, 29 December 20
CORROSION-RESISTANT STEELS FOR CARGO OIL TANKS - DNV GL
KNOWLEDGE TO ELEVATE
Crude oil is a complex mixture of substances at varying ratios and in most cases contains at least some salt water. ...
Tuesday, 29 December 20
CHINA COKING COAL FUTURES RISE FOR THIRD DAY ON SUPPLY WORRIES - REUTERS
Chinese coking coal futures extended gains into a third session on Monday, jumping as much as 6.2% as lower imports, sliding inventories and mines ...
Wednesday, 23 December 20
COKING COAL'S DECLINE LIKELY TO FOLLOW THE PATH OF THERMAL COAL’S PROGRESSIVE DEMISE - IEEFA
Technology disruption the likely theme of global energy markets in 2021
There has been a growing tsunami of climate commitment annou ...
Wednesday, 23 December 20
MARKET INSIGHT - INTERMODAL
As we all know, China forges more steel than the rest of the world combined, and even during this unprecedented pandemic, the nation is set to brea ...
Tuesday, 22 December 20
2021 DRY BULK OUTLOOK - SUPPLY GROWTH - TORVALD KLAVENESS
In the first article in the series we mentioned that dry bulk freight was in a super cycle between 2001 and 2008. The growth in global yard capacit ...
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- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- CNBM International Corporation - China
- SMC Global Power, Philippines
- McConnell Dowell - Australia
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