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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, 16 December 20
CHINA TO BOOST DOMESTIC SUPPLY - FITCH
China’s benchmark Qinhuangdao 5,500kcal/kg coal price rose above the government’s upper yellow interval of CNY600/tonne in early Octobe ...
Wednesday, 16 December 20
INDONESIAN COAL RECOVERING - FITCH
Commenting on Indonesian coal, Fitch Ratings, the Indonesian 4,200 kcal index has begun to recover, improving to over USD 29 in November compared t ...
Tuesday, 15 December 20
NEWCASTLE PRICES RECOVER - FITCH
Prices for the benchmark Newcastle 6,000 kcal/kg grade coal have rebounded to over USD 70/tonne since late November as major Asian economies ease l ...
Tuesday, 15 December 20
APAC COAL PRICES REBOUND ON IMPROVED DEMAND AND SUPPLY CUTS - FITCH RATINGS
Prices for the benchmark Newcastle 6,000kcal/kg grade coal have rebounded to over USD70/tonne since late November as major Asian economies ease loc ...
Tuesday, 15 December 20
CHINA EXTENDS FULL OPEN GESTURE TO IMPORTED COAL EXCEPT FOR AUSTRALIA - GLOBAL TIMES
Domestic, overseas suppliers will take up share with easier clearance
China's top economic planner on Saturday gave approval to ...
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- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- The University of Queensland
- Deloitte Consulting - India
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Australian Coal Association
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
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