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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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Monday, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
Monday, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
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- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Planning Commission, India
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
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