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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, 25 November 20
DRY BULK SHIPPING: CHINA REMAINS THE DRIVING FACTOR, BUT COAL POLICY IS DISRUPTING THE MARKET - PETER SAND, BIMCO
The second half of the year has provided some cheer for the dry bulk market, with all ships in the spot market averaging earnings above the break-e ...
Wednesday, 25 November 20
CHINA KICKS AN OWN GOAL WITH AUSTRALIAN COAL - FORBES
China’s annoyance at Australia’s hardline stance on political interference and demands for an independent inquiry into the root cause o ...
Wednesday, 25 November 20
MINISTER - INDONESIA JAN-OCT COAL OUTPUT AT 459 MILLION TONNES - REUTERS
Indonesia coal output in the January to October period was 459 million tonnes, the country’s energy minister told parliament on Monday.
& ...
Wednesday, 25 November 20
INDIA: MORE STEPS NEEDED TO MAKE COMMERCIAL COAL MINING ATTRACTIVE TO GLOBAL PLAYERS - LIVEMINT
India concluded its first commercial coal mine auctions earlier this month. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odish ...
Wednesday, 25 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.38 PCT - XINHUA
China Taiyuan coal transaction price index stood at 129.21 points Monday, up 0.38 percent week on week.
The index, released by China ...
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- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
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