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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, 17 November 20
AUSTRALIAN COAL EXPORTS TO CHINA SLUMP, BUT PRICES ARE MIXED - REUTERS
China’s unofficial ban on coal imports from Australia is starting to take its toll on volumes, with departing cargoes down sharply so far in ...
Friday, 13 November 20
SHIPPING OUTLOOK TURNS STABLE ON EBITDA GROWTH, IMPROVING SUPPLY-DEMAND BALANCE - MOODY’S
Outlook revised to stable from negative.
The global shipping industry is on course to perform better overall than we had previously ex ...
Friday, 13 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Monday, 09 November 20
INDONESIA MAY CUT BIODIESEL USE TARGET AS SUBSIDY FUND DEPLETES - FITCH
The Indonesian government may rein in its push to increase use of biodiesel as it now comes at higher cost following a fall in crude oil prices and ...
Monday, 09 November 20
SOUTH AFRICA: COAL MARKET CONDITIONS HAVE ' DETERIORATED MATERIALLY' - IEEFA
The Asian seaborne thermal coal pool is drying out
Resource Generation Ltd’s proposed but long delayed Boikarabelo coal mine i ...
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- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
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- GMR Energy Limited - India
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- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
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- Parliament of New Zealand
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- Grasim Industreis Ltd - India
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- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Posco Energy - South Korea
- Cement Manufacturers Association - India
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- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
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- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
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