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