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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, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announc ...
Wednesday, 24 June 20
MARKET INSIGHT - INTERMODAL
The World Bank estimates that the global economy will fall by 5.2% this year, underlining that the Covid-19 pandemic has had rapid and massive cons ...
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- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
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- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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