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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, 02 June 20
THE HISTORIC DECLINE OF US COAL - WOOD MACKENZIE
The first commercial power plant in the US was Thomas Edison’s coal-fired Pearl Street station in lower Manhattan, which started operating in ...
Tuesday, 02 June 20
COAL INDIA'S MAY SALES DRIVEN SHARPLY LOWER BY SLUMP IN POWER DEMAND - REUTER
Coal India’s sales fell 23.3% in May as utilities refrained from purchases amid record stockpiles and tepid demand because of a nationwide lo ...
Tuesday, 02 June 20
TUAH TURANGGA AGUNG RECORDED 4.54 MILLION TONS OF COAL SALES IN THE FIRST FOUR MONTHS OF 2020
PT United Tractors Tbk through its subsidiary, PT Tuah Turangga Agung recorded 4.54 million tons of coal sales in the first four months of 2020, up ...
Tuesday, 02 June 20
SOURING SINO-AUSTRALIA TRADE RELATIONS - BALTIC EXCHANGE
Cooling relations between the commodity powerhouses of China and Australia may point to trade troubles ahead when the world emerges from the Covid- ...
Tuesday, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
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- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Planning Commission, India
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
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