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