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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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Friday, 06 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 ...
Thursday, 05 November 20
THE INDONESIA COAL PRICE REFERENCE RISES FOR SECOND CONSECUTIVE MONTH
COALspot.com: The Indonesia Coal Price Reference rose for a 2nd month by 9.24% month on month. The Indonesia Coal Price Reference for the month of ...
Wednesday, 04 November 20
PHILIPPINES COAL MORATORIUM HIGHLIGHTS DRAMATIC PIVOT TO RENEWABLE ENERGY INVESTMENT FOR LOWER PRICES AND POWER SYSTEM RESILIENCE - IEEFA
Policymakers and industry leaders ready to embrace new energy technologies
The Department of Energy’s call for a moratorium on ...
Wednesday, 04 November 20
FOREIGN INVESTORS FACE TOUGH TIMES CLOSING VIETNAM’S REMAINING COAL POWER DEALS - IEEFA
Project bankability at risk as new regulations threaten usual contractual terms
Foreign investors will face higher-than-usual risks ...
Wednesday, 04 November 20
MARKET INSIGHT - INTERMODAL
As the end of the year approaches, one would definitely notice that the newbuilding orderbook for bulk carriers is significantly smaller compared t ...
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- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
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