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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, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
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- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Australian Coal Association
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- White Energy Company Limited
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
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