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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, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
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- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- The University of Queensland
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
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