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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, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
Wednesday, 12 August 20
U.S. COAL PRODUCTION IN 2020 WILL DECREASE BY 29% FROM 2019 LEVELS TO 502 MMST - EIA
U.S. coal consumption, which dropped to its lowest point since April, totaled 95 MMst in the second quarter of 2020.
EIA expec ...
Tuesday, 11 August 20
BHP COAL ASSETS WORTH A BILLION LESS THAN JUST TWO YEARS AGO - IEEFA
Another global investor, the UK’s biggest public pension fund NEST, has withdrawn funds from BHP this week because the company is profiting & ...
Monday, 10 August 20
COAL IMPORT DROPS 43% IN JULY OWING TO HIGH STOCKPILE AT PITHEADS, PLANTS - PTI
“The market participants seem to have adopted a wait and watch approach and are currently looking for a direction. We do not expect to see an ...
Saturday, 08 August 20
GLOBAL COAL POWER PUZZLE - BALTIC EXCHANGE
Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
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- Bhushan Steel Limited - India
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- Eastern Coal Council - USA
- White Energy Company Limited
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Petron Corporation, Philippines
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- New Zealand Coal & Carbon
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- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Economic Council, Georgia
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
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- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
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- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
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- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
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- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
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- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Australian Coal Association
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
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- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
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- Antam Resourcindo - Indonesia
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