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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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Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
Wind, solar, electric vehicles, stationary storage and transmission are all central to achieving the Paris Agreement decarbonisation goals.
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Monday, 06 July 20
INDONESIAN COAL PRICE REFERENCE IN FREE FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 06 July 20
SUPRAMAX: A 58,000-DWT FIXING DELIVERY VIETNAM TRIP VIA INDONESIA RE-DELIVERY WEST INDIA IN THE LOW $4,000S
Capesize
The Capesize market continues to go from strength to strength, as rates reach highs not seen since September last year. The rally is p ...
Thursday, 02 July 20
PRIVATE COAL MINING MAY SEE WEAK INVESTOR SENTIMENT: ICRA - LIVEMINT
The prospects of commercial coal mining in India may be dimmer than initially expected because of the expected shift in India’s energy mix fr ...
Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
It i ...
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- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- The University of Queensland
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
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- Sakthi Sugars Limited - India
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