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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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Wednesday, 20 May 20
ADARO ENERGY BOOKED A 5% INCREASE IN COAL PRODUCTION VOLUME Y-O-Y IN 1Q2020
PT. Adaro Energy Tbk, Indonesia’s one of the largest coal miner, booked a 5% increase in coal production volume year-over-year in 1Q2020. The ...
Wednesday, 20 May 20
BRAZIL SOYBEAN EXPORTS HAVE BEEN SURGING THIS YEAR - BANCHERO COSTA
Brazil soybean exports have been surging this year, thanks to a combination of strong demand from China, a bumper crop, and favourable exchange rat ...
Wednesday, 20 May 20
MARKET INSIGHT
Seafarers keep maritime trade going so that the food, raw materials, energy and manufactured goods on which so many depend can continue moving arou ...
Tuesday, 19 May 20
AMENDMENT OF THE INDONESIAN MINING LAW: TYING UP LOOSE ENDS - UMBRA
KNOWLEDGE TO ELEVATE
The finalized draft of Law on the amendment of the Mining Law (Bill) was publicly released on 11 May 2020 and was then ap ...
Monday, 18 May 20
TAKING ADVANTAGE OF VIRUS DISTRACTION - BALTIC EXCHANGE
As the industry grapples to deal with exceptional Covid-19-related challenges, a deeper threat is coming to the fore. At this time of crisis, more ...
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- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
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