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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, 12 May 20
CAN INDONESIA'S COAL INDUSTRY SURVIVE COVID-19? : IEEFA
Pandemic Lockdown and Slumping Prices Put Extreme Pressure on Coal Miners
Executive Summary
While attention has been focused on th ...
Tuesday, 12 May 20
INDIA'S COAL PRODUCTION TO CLOCK RECORD 700 MILLION TONNES IN FY21: COAL SECRETARY - PTI
Coal Secretary Anil Jain said FY20 coal production was lower than the target of 660 million tonnes because of flooding of a key coal mine.
&nbs ...
Monday, 11 May 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Monday, 11 May 20
CORONAVIRUS PUTS MORE THAN A THIRD OF SEABORNE COAL SUPPLY AT RISK - WOOD MACKENZIE
The full impact of the coronavirus outbreak on the global economy is yet unclear. However, the demand destruction is already becoming evident, with ...
Saturday, 09 May 20
ANGLO AMERICAN CONSIDERS SPINNING OFF SOUTH AFRICAN COAL OPERATIONS - REUTERS
Diversified miner Anglo American said on Thursday it prefers unbundling and listing its thermal coal operations in South Africa on the Johannesburg ...
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- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
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- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
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- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
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- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
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- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
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- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- White Energy Company Limited
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- The University of Queensland
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
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