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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, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest priva ...
Thursday, 06 August 20
SUPRAMAX MARKET CONTINUED SIDEWAYS TREND, AND LITTLE INSPIRING NEWS APPEAR - FEARNLEYS
Capesize
There is presently a small correction in rates, but overall levels are up from previous week mainly due to increased demand in the Eas ...
Thursday, 06 August 20
KOREA SOUTH-EAST POWER INVITING BIDS FOR MIN 3,600-MAX 3,800 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) inviting bids for 80,000 Tons (MT) Min 3,600~Max 3,800 kcal/kg NCV coal f ...
Wednesday, 05 August 20
NO NEW MINING LICENSES - A REMINDER TO GOVERNORS IN INDONESIA - SSEK
Indonesia’s acting Director General of Mining and Coal (“DGMC”) has issued a letter to the country’s provincial Governors t ...
Wednesday, 05 August 20
AUGUST 2020 HBA HITTING ITS LOWEST LEVELS IN HISTORY
COALspot.com: The Indonesia Coal Price Reference for the month of August plunged 30.73% YoY, hitting its lowest levels in history and highlighting ...
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- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Planning Commission, India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- White Energy Company Limited
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- MS Steel International - UAE
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