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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, 14 May 20
NEW COVID-19 GUIDELINES FOCUS ON SAFE INTERFACE BETWEEN SHIP AND SHORE STAFF - GARD
At a time when the COVID-19 pandemic is affecting the global population, it is important that ships’ crew and port workers protect each other ...
Wednesday, 13 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.4 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.93 points Monday, down 0.4 percent week on week.
The index, released by Chin ...
Tuesday, 12 May 20
IN THE FIRST 4 MONTHS OF 2020, SOUTH KOREA IMPORTED 46.6 MLN TONNES OF CRUDE OIL BY SEA, A NET DECLINE OF 14.1% YOY - BC
South Korea is certainly one of the countries which has handled better the current Covid-19 crisis. In the first week of May 2020, new cases of ...
Tuesday, 12 May 20
OIL MARKET TURBULENCE PIVOTS FOCUS ON FLOATING STORAGE TECHNICAL NEEDS - LLOYD'S REGISTER
KNOWLEDGE TO ELEVATE
Negative oil prices and off-the-scale volatility in crude markets are positive for floating storage, as the next chapter ...
Tuesday, 12 May 20
A GLOBAL ECONOMIC RESTART HAS SLOWLY BEGUN AS COUNTRIES AROUND THE WORLD GRADUALLY - ALLIED
A global economic restart has slowly begun as countries around the world gradually set their return back to “normality”. Yet by all mea ...
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- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Australian Coal Association
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
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