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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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Monday, 14 December 20
PHILIPPINE BANK RCBC TO STOP LENDING FOR NEW COAL-FIRED POWER PROJECTS - MANILA BULLETIN
Yuchengco-led Rizal Commercial Banking Corporation (RCBC) has forthrightly declared that it will no longer extend financing to new coal-fired power ...
Sunday, 13 December 20
LONGSTANDING DOWNSIDE RISKS TO TRADE OUTLOOK - BALTIC EXCHANGE
The OECD has attempted to put a positive spin on the trade message emanating from its latest economic outlook, released last week.
The ...
Sunday, 13 December 20
INDONESIA COAL OUTPUT AT 514 MILLION TONNES THIS YEAR, 2021 TARGET UNCHANGED - REUTERS
Indonesia coal output in the period to Dec. 10 stood at 514.2 million tonnes, official data from the energy ministry’s website showed.
&n ...
Thursday, 10 December 20
MALAYSIA'S CIMB ANNOUNCES COAL FINANCING PHASE-OUT BY 2040 AS ASIA'S FOSSIL FUEL DIVESTMENT DRIVE ACCELERATES - IEEFA
The first emerging markets bank to announce a progressive coal exit policy
Malaysia’s CIMB Group Holdings (CIMB) has announced ...
Wednesday, 09 December 20
MARKET INSIGHT - INTERMODAL
Heading towards the end of a difficult year and with the entire planet under the shadow of the covid-19 virus, it is interesting to proceed with a ...
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- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
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