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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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Wednesday, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
Wednesday, 12 August 20
U.S. COAL PRODUCTION IN 2020 WILL DECREASE BY 29% FROM 2019 LEVELS TO 502 MMST - EIA
U.S. coal consumption, which dropped to its lowest point since April, totaled 95 MMst in the second quarter of 2020.
EIA expec ...
Tuesday, 11 August 20
BHP COAL ASSETS WORTH A BILLION LESS THAN JUST TWO YEARS AGO - IEEFA
Another global investor, the UK’s biggest public pension fund NEST, has withdrawn funds from BHP this week because the company is profiting & ...
Monday, 10 August 20
COAL IMPORT DROPS 43% IN JULY OWING TO HIGH STOCKPILE AT PITHEADS, PLANTS - PTI
“The market participants seem to have adopted a wait and watch approach and are currently looking for a direction. We do not expect to see an ...
Saturday, 08 August 20
GLOBAL COAL POWER PUZZLE - BALTIC EXCHANGE
Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
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- SMG Consultants - Indonesia
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- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- White Energy Company Limited
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- The University of Queensland
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- Ministry of Transport, Egypt
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- Global Business Power Corporation, Philippines
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- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
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- Carbofer General Trading SA - India
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- Maharashtra Electricity Regulatory Commission - India
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- Uttam Galva Steels Limited - India
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
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- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
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- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
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- Bayan Resources Tbk. - Indonesia
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