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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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Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
Wind, solar, electric vehicles, stationary storage and transmission are all central to achieving the Paris Agreement decarbonisation goals.
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Monday, 06 July 20
INDONESIAN COAL PRICE REFERENCE IN FREE FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 06 July 20
SUPRAMAX: A 58,000-DWT FIXING DELIVERY VIETNAM TRIP VIA INDONESIA RE-DELIVERY WEST INDIA IN THE LOW $4,000S
Capesize
The Capesize market continues to go from strength to strength, as rates reach highs not seen since September last year. The rally is p ...
Thursday, 02 July 20
PRIVATE COAL MINING MAY SEE WEAK INVESTOR SENTIMENT: ICRA - LIVEMINT
The prospects of commercial coal mining in India may be dimmer than initially expected because of the expected shift in India’s energy mix fr ...
Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
It i ...
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- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Australian Coal Association
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- White Energy Company Limited
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- The University of Queensland
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
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