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