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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, 08 December 20
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Friday, 04 December 20
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THE INDONESIA COAL PRICE REFERENCE REACHES THREE MONTH HIGH ON IMPROVING DEMAND OUTLOOK
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- PTC India Limited - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Central Electricity Authority - India
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- The Treasury - Australian Government
- Posco Energy - South Korea
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Planning Commission, India
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
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