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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, 02 December 20
INDONESIA CONSIDERING CLOSING 3,400MW SURALAYA COAL PLANT - THE JAKARTA POST
The government is considering to shut down the aging Suralaya coal-fired power plant (PLTU) in Cilegon, Banten, and replace it with green energy, a ...
Wednesday, 02 December 20
MARKET INSIGHT - INTERMODAL
It has been another busy week in the dry bulk secondhand market; a healthy number of sales reported predominantly from Japanese owners while owner& ...
Thursday, 26 November 20
DECLINE IN COAL EXPORTS ADDS TO NAVAJO-OWNED COMPANY'S PROBLEMS - IEEFA U.S.
Weak demand and low prices are likely creating steep losses for NTEC
U.S. coal exports to Asia—once heralded as the saving gra ...
Thursday, 26 November 20
COAL FINANCING QUICKLY DRYING UP WORLDWIDE - ANALYSTS : REUTERS
Financing for coal projects is drying up at ever increasing rates as more countries target zero carbon emissions amid an energy transition sweeping ...
Wednesday, 25 November 20
LIBOR REPLACEMENT AND SHIP FINANCE - WHERE IS IT HEADING? - WFW
The likely replacement of the LIBOR at the end of 2021 creates difficult technical and practical issues for all sectors of business and finance. Th ...
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- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
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- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
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