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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, 04 June 20
DON'T FORGET THE REAL PURPOSE OF RISK ASSESSMENTS - GARD
KNOWLEDGE TO ELEVATE
When doing a risk assessment, we often overcomplicate it and forget its real purpose.
Rather than ensuring that crew ...
Wednesday, 03 June 20
MARKET INSIGHT - INTERMODAL
Once again shipping is about to venture into uncharted waters and before the challenges of the past decade are forgotten, shipowners will have to o ...
Tuesday, 02 June 20
KOSPO LOOKING FOR 80000 MT OF 4200 NCV COAL FOR JULY
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) 4200 NCV coal for 12 - 21, July ...
Tuesday, 02 June 20
INDONESIAN COAL MINER BUMI RESOURCES Q1 OUTPUT UP 5% - REUTERS
Indonesia’s largest coal miner Bumi Resources posted a 5% increase in first-quarter output at 20.8 million tonnes, the company said in a stat ...
Tuesday, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
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- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Parliament of New Zealand
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- White Energy Company Limited
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
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