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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, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
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- Baramulti Group, Indonesia
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- Independent Power Producers Association of India
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- Indika Energy - Indonesia
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
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- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
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- Bhatia International Limited - India
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
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- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
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- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
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- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Minerals Council of Australia
- Chamber of Mines of South Africa
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
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