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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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- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Marubeni Corporation - India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- White Energy Company Limited
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Posco Energy - South Korea
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- The University of Queensland
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
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