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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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Thursday, 11 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitc ...
Wednesday, 10 June 20
MARKET INSIGHT - INTERMODAL
In contrast to the economic projections of the past two years for the first half of 2020, the oil & gas industry and those involved in it faced ...
Wednesday, 10 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.19 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.71 points Monday, down 0.19 percent week on week.
The index, released by Chi ...
Tuesday, 09 June 20
BUNKER SUPPLY CONTRACTS - KEY CONSIDERATIONS FOR THE BUYER - GARD
KNOWLEDGE TO ELEVATE
Regardless of whether a buyer purchases fuel directly from physical suppliers or via brokers or traders and whether sale ...
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- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- The University of Queensland
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
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