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