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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, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
Wednesday, 01 July 20
MARKET INSIGHT - INTERMODAL
It was beginning of 2020 – close to 6 months from now – when we first experienced the huge impact of the COVID 19 outbreak on Ship Repa ...
Monday, 29 June 20
INDONESIAN COAL AT THE MERCY OF THE DRAGON AND TIGER - GHEE PEH | IEEFA
Coal sector analysts have been busy in recent months mapping the negative impact of low coal prices from the COVID-19 pandemic on Indonesian coal c ...
Monday, 29 June 20
FALLING DEMAND IN CHINA AND INDIA SIGNAL TOUGH TIMES AHEAD FOR INDONESIAN EXPORTS - GHEE PEH | EEFA
Assessing the Impact on Indonesian Coal Companies
The bad news for Indonesia’s coal companies is that they are likely to have ...
Monday, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in th ...
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- Central Java Power - Indonesia
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Videocon Industries ltd - India
- Parliament of New Zealand
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
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