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Wednesday, 21 January 15
THERMAL COAL PRICE OUTLOOK DEPENDENT ON INDIAN IMPORT DEMAND - MATTHEW BOYLE, CRU
 COALspot.com: Supply and demand side developments in India will be an important determinant of future market dynamics and prices for thermal coal according to analysis in CRU's new Thermal Coal Market Outlook service.
The possible volatility in import requirements is substantial, given considerable uncertainty over both domestic supply and demand. Potential volatility in imports or range of outcomes is exacerbated by the fact that India is largely self-sufficient in thermal coal, and its imports account for only ~20% of its demand.
India's domestic demand in 2014 equalled around 80% of the global seaborne market, which means that small changes in supply and demand can have a relatively large impact on total import requirements. Even if domestic coal production was to increase, there would still be issues getting the coal to market due to logistical bottlenecks. CRU has undertaken scenario analysis of potential forecast changes to India's imports, and suggests given the wide range of outcomes, its impact will be felt by the seaborne market.
-- Under CRU's base case scenario, Indian domestic production is expected to grow at a CAGR of 4.8%, while Indian coal-fired capacity growth is expected to grow at a CAGR of 5.1%. Power capacity utilization rates in India, which have fallen in recent years, are expected to gradually recover, yet remain below historic levels. Under this scenario, Indian demand is expected to grow at a CAGR of 6.8%, but critically, import requirements are expected to grow at a CAGR of 12.5%, highlighting import sensitivity in such a large market.
-- Under a bull case for Indian imports, domestic Indian production will grow at a CAGR of 3%, more in line with historic performance, and consumption to grow in line with current coal-fired construction projects and plans. Under such as scenario, we estimate that total Indian demand would grow at a CAGR of 9% (i.e. only 2.2% higher than in the base case), but import requirements would increase at a staggering 18.5% CAGR.
-- Under a bear case scenario for imports, domestic Indian output growth is set closer to current production targets at a CAGR of 7%, whereas consumption growth is limited to the most advanced and likely Indian coal-fired construction projects coming on stream. Under such scenario, we estimate that total demand would grow at a 5.1% CAGR (i.e. only 2.5% lower than in the base case), and import requirements to increase at a very modest 5.4%, adding only 8-10 Mt to total imports/y.
India will be instrumental in determining how much seaborne material will be available for delivery to China, which acts as the clearing market, and remains a key pricing driver. The difference in Indian import volumes between the base case and the two scenarios is 90-110 Mt on either side, equivalent in size to the entire South Korean market.
India's coal industry, in many ways, is at a cross-roads. After a number of years of less than spectacular domestic production growth failing to keep up with power consumption growth, and in turn, a significant increase in and reliance on imported thermal coal, the new Modi government has stepped up plans to increase domestic coal production and power generation. The reallocation of domestic coal blocks, interaction with labour unions and the approval of forest clearances are all signs the government is willing to push ahead with domestic output growth. Whilst the plans are aggressive and needed to reverse an almost paralyzed domestic coal industry, we maintain the view that unless there are seismic changes in Indian policy and red and green tape, we are not as optimistic as the government's domestic coal production targets. We estimate Indian coal output to be 599.0 Mt in 2014 with CAGR of 4.8% between 2013 and 2019.
The imbalance between thermal coal production and thermal coal demand growth looks set to continue over the forecast period, requiring an additional 136 Mt of imports by 2019. The majority of this import growth is expected to materialize over the next three years as significant coal-fired capacity comes on stream, and CRU expects India to replace China as the world's largest import market by 2015-2016.
- This article was initially published in CRU -
About Author
Matthew Boyle | Principal Consultant, CRU
Matthew has over fifteen years experience in the metals and mining industry, and has specialized in the metallurgical and thermal coal markets for the past ten years. Prior to joining CRU in January 2014, Matthew had worked in a number of commodity research and analytical roles, including Vale. Matthew has extensive overseas experience, having worked in Tokyo, London, and Singapore, as well as Sydney and Brisbane in Australia. Matthew holds a triple-major Bachelor of Arts (Honours) degree in economic geography from the University of Sydney, and has completed technical coal utilisation courses from McMaster University in Hamilton, Ontario, Canada.
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Wednesday, 21 January 15
PANAMAX MARKET MOVED SIDEWAYS OVERALL LAST WEEK - INTERMODAL
COALspot.com: The positive sentiment in which the week prior ended carried on through-out last week as well, the end of which marked the first posi ...
Wednesday, 21 January 15
SHIFT IN INTERNATIONAL COAL TRADE TO THE PACIFIC BASIN WILL CONTINUE - IMF
COALspot.com: The shift in international coal trade to the Pacific Basin will continue, IMF said in its latest Medium-Term Coal Market Report.
...
Wednesday, 21 January 15
MARKET INSIGHT - VASSILIS LOGOTHETIS, INTERMODAL
The World Bank has lowered its forecast for global growth in 2015 to 3% down from its previous level of 3.4% amid rising concerns over the economic ...
Wednesday, 21 January 15
PORT OF NEWCASTLE COAL EXPORTS JUMP 16.19% ON MONTH TO 15.80 MIL MT IN DECEMBER' 14
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.136 billi ...
Tuesday, 20 January 15
INDIA TO SURPASS THE UNITED STATES AND BECOME THE SECOND-LARGEST COAL CONSUMER IN THE WORLD BY 2019 - IMF
COALspot.com: In 2013, coal added more primary energy than any other fuel and was the fastest-growing fossil fuel, enhancing its position as the se ...
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- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
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- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
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- Altura Mining Limited, Indonesia
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- Eastern Energy - Thailand
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- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Latin American Coal - Colombia
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Minerals Council of Australia
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
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- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
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