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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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Friday, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
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- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
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