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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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Monday, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
Monday, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
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- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Economic Council, Georgia
- Planning Commission, India
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Australian Coal Association
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
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