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