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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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Saturday, 01 August 20
SHIP SHAPE - OUCH: FIS
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Saturday, 01 August 20
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Friday, 31 July 20
SHORT-TERM IMPACT ON THE CHEMICAL SHIPPING MARKET IF THE INDIA-CHINA DISPUTE ESCALATES - DREWRY
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Friday, 31 July 20
PANAMAX: THE PERIOD MARKET REMAINS QUIET WITH FEW FIXTURES REPORTED - FEARNLEYS
Capesize
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Friday, 31 July 20
PANDEMIC SENDING SOUTH AFRICAN COAL INDUSTRY TO EARLIER GRAVE - IEEFA
Could South Africa’s coal export industry, one of the largest in the world, be about to take a severe hit from the coronavirus?
...
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- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- The University of Queensland
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Australian Coal Association
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
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