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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, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest priva ...
Thursday, 06 August 20
SUPRAMAX MARKET CONTINUED SIDEWAYS TREND, AND LITTLE INSPIRING NEWS APPEAR - FEARNLEYS
Capesize
There is presently a small correction in rates, but overall levels are up from previous week mainly due to increased demand in the Eas ...
Thursday, 06 August 20
KOREA SOUTH-EAST POWER INVITING BIDS FOR MIN 3,600-MAX 3,800 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) inviting bids for 80,000 Tons (MT) Min 3,600~Max 3,800 kcal/kg NCV coal f ...
Wednesday, 05 August 20
NO NEW MINING LICENSES - A REMINDER TO GOVERNORS IN INDONESIA - SSEK
Indonesia’s acting Director General of Mining and Coal (“DGMC”) has issued a letter to the country’s provincial Governors t ...
Wednesday, 05 August 20
AUGUST 2020 HBA HITTING ITS LOWEST LEVELS IN HISTORY
COALspot.com: The Indonesia Coal Price Reference for the month of August plunged 30.73% YoY, hitting its lowest levels in history and highlighting ...
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- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- White Energy Company Limited
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Australian Coal Association
- Minerals Council of Australia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
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