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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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Wednesday, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
Wednesday, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
MISC Berhad (MISC) is pleased to announce its acceptance of Letter of Intent (LOI) from Petróleo Brasileiro S.A. (Petrobras) for the provisi ...
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their ec ...
Wednesday, 19 August 20
INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
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- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- The University of Queensland
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
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