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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, 15 July 20
CHINA'S JUNE COAL IMPORTS FALL 6.7% Y/Y ON PORT CURBS - REUTERS
China’s coal imports dropped 6.7% in June from the same period last year, as stringent import restrictions at ports impeded purchases by trad ...
Wednesday, 15 July 20
MARKET INSIGHT - INTERMODAL
The Covid-19 virus spread around the world has obviously impacted the global oil demand while the situation remains fluid. The overall constraint ...
Tuesday, 14 July 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.75 PCT - XINHUA
China Taiyuan coal transaction price index stood at 126.01 points Monday, up 0.75 percent week on week.
The index, released by China ...
Tuesday, 14 July 20
TURKEY - A CASE OF UNDECLARED BUNKER - GARD
KNOWLEDGE TO ELEVATE
Undeclared/excess bunkers can be considered a criminal act by Turkish customs officials with the ship's crew being ac ...
Monday, 13 July 20
PANAMAX: A TUMULTUOUS WEEK IN THE PANAMAX MARKET ENSURED ALL MARKETS GAINED VALUE ON THE WEEK - BALTIC BRIEFING
Capesize
This week witnessed the dreaded correction in the Capesize market, with the time charter average shedding almost 18 per cent to close ...
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- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- The Treasury - Australian Government
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
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