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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, 31 July 20
BOTSWANA PLANS MORE COAL-FIRED POWER AS AFRICAN SOLAR ACCELERATES - IEEFA
An African economic leader like Botswana should embrace solar to reduce subsidies and tariff hikes
As Sub-Saharan solar ambition has ...
Wednesday, 29 July 20
2019 U.S. COAL PRODUCTION FALLS TO ITS LOWEST LEVEL SINCE 1978 - EIA
In 2019, U.S. coal production totaled 706 million short tons (MMst), a 7% decrease from the 756 MMst mined in 2018. Last year’s production wa ...
Wednesday, 29 July 20
MARKET INSIGHT - INTERMODAL
The dry bulk sector is beginning to recover from reduced SnP activity recorded in the first quarter of 2020. The table below illustrates that appro ...
Tuesday, 28 July 20
DEUTSCHE BANK TO END GLOBAL BUSINESS ACTIVITIES IN COAL MINING BY 2025 - REUTERS
Deutsche Bank, in a revamp of its policies for fossil fuels, said on Monday that it would end business activities worldwide related to coal mining ...
Monday, 27 July 20
IEEFA ENERGY FINANCE CONFERENCE 2020: COAL, LNG, PETROCHEMICAL SECTORS FACE POOR OUTLOOK AND UPHILL BATTLE FOR INVESTORS
Fossil fuel industries were becoming less financially attractive even before the global coronavirus pandemic
Three major fossil fuel ...
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- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
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