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