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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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Monday, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announc ...
Wednesday, 24 June 20
MARKET INSIGHT - INTERMODAL
The World Bank estimates that the global economy will fall by 5.2% this year, underlining that the Covid-19 pandemic has had rapid and massive cons ...
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- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Economic Council, Georgia
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Central Electricity Authority - India
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- The University of Queensland
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
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