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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, 05 August 20
SLUMP IN OIL REVENUE CHALLENGES MIDDLE EAST OIL EXPORTERS - INTERMODAL
The Covid-19 pandemic has had far-reaching consequences on the global capital markets. Despite the US government’s efforts for a quick and de ...
Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 260,000 to 300,000 Tons (MT) min. ...
Tuesday, 04 August 20
THE WORLD’S FLEET OF COAL-FIRED POWER STATIONS HAS GOT SMALLER FOR THE FIRST TIME ON RECORD, WITH MORE CAPACITY RETIRED IN THE FIRST HALF OF 2020 THAN THE AMOUNT OPENED - IEA
This is according to the latest Global Coal Plant Tracker (GCPT) results by Global Energy Monitor (GEM), which we completed last month and report f ...
Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
The collapse in oil prices and the coronavirus shock is worsening the fiscal and external balances of sub-Saharan African oil producers, Fitch Rati ...
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- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Latin American Coal - Colombia
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- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
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- White Energy Company Limited
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- Indogreen Group - Indonesia
- Aditya Birla Group - India
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- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
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- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
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