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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, 10 July 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 10 July 20
GLOBAL SHIPPING EARNINGS FORECAST CUT AS SUPPLY SET TO OUTSTRIP DEMAND - MOODY'S
EBITDA forecast worsens, keeping outlook negative. We now expect the aggregate EBITDA of rated shipping companies to fall by around 16%-18% in 2020 ...
Friday, 10 July 20
SLOW RECOVERY IN TANKER RATES TO WEIGH ON BUANA LINTAS LAUTAN - FITCH RATINGS
Fitch Ratings believes that international tanker rates are likely improve after their sharp fall since May 2020, albeit at a slow pace. The weaknes ...
Wednesday, 08 July 20
MARKET INSIGHT - INTERMODAL
During the previous month, the dry bulk market witnessed an impressive increase in the BDI index that has reached 1800 points from 500 with a clear ...
Tuesday, 07 July 20
COAL INDIA WORKERS STRIKE CUTS OUTPUT BY 56%: OFFICIAL - REUTERS
A strike at Coal India Ltd cut production by 56% in the three days ending July 4 as workers oppose opening up coal mining to the private sector, a ...
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- Parry Sugars Refinery, India
- GMR Energy Limited - India
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- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
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- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Australian Coal Association
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
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- Metalloyd Limited - United Kingdom
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- LBH Netherlands Bv - Netherlands
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- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
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- Samtan Co., Ltd - South Korea
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- Global Green Power PLC Corporation, Philippines
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- Baramulti Group, Indonesia
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- Star Paper Mills Limited - India
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- Bharathi Cement Corporation - India
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- Coalindo Energy - Indonesia
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- SMC Global Power, Philippines
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- Bayan Resources Tbk. - Indonesia
- The University of Queensland
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- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
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- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
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- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
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- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
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- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
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- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
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- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
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- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
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- Mercator Lines Limited - India
- White Energy Company Limited
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
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- Borneo Indobara - Indonesia
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- Indian Oil Corporation Limited
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