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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, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
Wednesday, 26 August 20
ASIAN COAL PRICES LIKELY TO REMAIN DEPRESSED SAY TRADERS, ANALYSTS - REUTERS
Asian coal prices, which have fallen around 25% this year as power demand slumped due to the coronavirus outbreak, are unlikely to move higher befo ...
Wednesday, 26 August 20
WORLD COAL EXPORTS: INDONESIAN THERMAL COAL EXPORTS HAVE COME UNDER PRESSURE AS THERMAL COAL PRICES WEAKEN - REPORT
Indonesia’s exports to decline sharply from record highs
Indonesia is the world’s largest thermal coal exporter, sellin ...
Wednesday, 26 August 20
JAPAN'S COAL IMPORTS ARE BEING AFFECTED BY COMPETING INFLUENCES - REPORT
Japan is the world’s third largest thermal coal importer, importing an estimated 135 million tonnes of thermal coal in 2019. The country&rsqu ...
Wednesday, 26 August 20
PENDING SOUTH KOREA LEGISLATION COULD FORCE HALT TO COUNTRY’S COAL PLANT EXPORT DEALS - KOREA ECONOMIC DAILY
South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired p ...
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- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Wilmar Investment Holdings
- White Energy Company Limited
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Planning Commission, India
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Marubeni Corporation - India
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- The University of Queensland
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
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