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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, 27 October 20
PLN STILL REFUSING TO ADAPT, A MOVE WHICH WILL HURT INVESTORS, CONSUMERS, AND THE GOVERNMENT PURSE - IEEFA
Utility’s latest planning report locks PLN into the past
PLN would be better served restructuring its business to address the current en ...
Monday, 26 October 20
'LONG ASCENT' TO RECOVERY OF GLOBAL GROWTH - BALTIC EXCHANGE
The global economy has so far avoided a “financial catastrophe” but growth projections from the International Monetary Fund’s lat ...
Friday, 23 October 20
SHIPPING LOANS AND COLLATERAL DAMAGE - VICTOR ONYEGBADO, AKABOGU & ASSOCIATES
KNOWLEDGE TO ELEVATE
Shipping finance transactions are characterised by peculiar risk factors principally on account of the shipping asset&rsq ...
Friday, 23 October 20
WHAT WILL THE 2020 ELECTIONS MEAN FOR US ENERGY? - WOOD MACKENZIE
The 2020 elections present American voters with a choice between two radically different visions for the future of energy. President Donald Trump r ...
Wednesday, 21 October 20
BRAZIL EXPORTED 238.7 MLN TONNES OF IRON ORE IN THE FIRST 9 MONTHS OF 2020 - BANCHERO COSTA
Brazil’s iron ore exports have been gradually but steadily recovering following a disastrous winter period of 2019/2020. In the first 9 month ...
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- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- The University of Queensland
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
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