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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, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- Maheswari Brothers Coal Limited - India
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- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
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- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Singapore Mercantile Exchange
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- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Interocean Group of Companies - India
- The University of Queensland
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- Wilmar Investment Holdings
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- Petron Corporation, Philippines
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- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
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- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
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- Maharashtra Electricity Regulatory Commission - India
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- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
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- Bukit Makmur.PT - Indonesia
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- Bhoruka Overseas - Indonesia
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- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
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- Videocon Industries ltd - India
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
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- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Australian Coal Association
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Planning Commission, India
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
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- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
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