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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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Thursday, 11 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitc ...
Wednesday, 10 June 20
MARKET INSIGHT - INTERMODAL
In contrast to the economic projections of the past two years for the first half of 2020, the oil & gas industry and those involved in it faced ...
Wednesday, 10 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.19 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.71 points Monday, down 0.19 percent week on week.
The index, released by Chi ...
Tuesday, 09 June 20
BUNKER SUPPLY CONTRACTS - KEY CONSIDERATIONS FOR THE BUYER - GARD
KNOWLEDGE TO ELEVATE
Regardless of whether a buyer purchases fuel directly from physical suppliers or via brokers or traders and whether sale ...
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- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
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