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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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Thursday, 17 December 20
CHINA'S BAN IS LESS OF A THREAT TO AUSTRALIA'S COAL INDUSTRY THAN INTERNATIONAL CLIMATE AMBITION - IEEFA
Australian coal exporters will survive this near-term political fight but there are longterm structural headwinds
The decision by Ch ...
Thursday, 17 December 20
BUMA SIGNED US$1.0 BILLION WORTH OF EXTENSION CONTRACT WITH BERAU COAL
PT Bukit Makmur Mandiri Utama, subsidiary of PT Delta Dunia Makmur Tbk., has extended its mining services contracts with PT Berau Coal, in relation ...
Wednesday, 16 December 20
INDONESIA 2020 COAL CONSUMPTION ESTIMATED AT 140-145 MLN TONNES - OFFICIAL, REUTERS REPORTED
Indonesia’s domestic coal consumption is estimated at 140-145 million tonnes this year, Dodik Ariyanto, an official at the energy ministry, t ...
Wednesday, 16 December 20
RUSSIA REVISES DOWN EXPORT EXPECTATION - FITCH
The Ministry of Economy of Russia, the world’s third largest thermal coal exporting country, released its annual forecasts ...
Wednesday, 16 December 20
INDIAN COAL IMPORTS TO REMAIN SUBDUED - FITCH RATINGS
Fitch Rating commented on Indian Coal Imports, Fitch said, coal imports by Indian utilities fell by about 24% yoy to 44 million tonnes (mt) i ...
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- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Planning Commission, India
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
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