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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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Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up fo ...
Thursday, 24 September 20
SUPRAMAX: INDO TO INDIA FIXING AROUND US$13,000 - FEARNLEYS
Cape
Over the last week the iron ore segment from Brazil to China has picked up, and we see freight rates up USD 2 (12%) week on week Fearnleys ...
Thursday, 24 September 20
KOREA MIDLAND POWER TO BUY 1.92 MILLION TONS OF 4,300-4,700 NCV COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 640,000 MT 4,300-4,700 kcal/kg NCV coal per year.
...
Wednesday, 23 September 20
VIETNAM'S NEW POWER DEVELOPMENT PLAN MUST OPTIMIZE RENEWABLES AND AVOID FOSSIL FUEL LOCK-IN: IEEFA
EVN’s financial constraints leaves the utility with little room for error
Implementing Vietnam’s soon-to-be-launched next Power De ...
Wednesday, 23 September 20
MARKET INSIGHT - INTERMODAL
Undoubtedly, this year (ongoing) will never be forgotten because in a matter of months it has managed to severely affect and shape our day to day p ...
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- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
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