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