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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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Wednesday, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
Wednesday, 01 July 20
MARKET INSIGHT - INTERMODAL
It was beginning of 2020 – close to 6 months from now – when we first experienced the huge impact of the COVID 19 outbreak on Ship Repa ...
Monday, 29 June 20
INDONESIAN COAL AT THE MERCY OF THE DRAGON AND TIGER - GHEE PEH | IEEFA
Coal sector analysts have been busy in recent months mapping the negative impact of low coal prices from the COVID-19 pandemic on Indonesian coal c ...
Monday, 29 June 20
FALLING DEMAND IN CHINA AND INDIA SIGNAL TOUGH TIMES AHEAD FOR INDONESIAN EXPORTS - GHEE PEH | EEFA
Assessing the Impact on Indonesian Coal Companies
The bad news for Indonesia’s coal companies is that they are likely to have ...
Monday, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in th ...
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- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
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