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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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Monday, 01 June 20
SUPRAMAX: IN SOUTH EAST ASIA RATES TRADED SIDEWAYS - BALTIC BRIEFING
Capesize
A sober end to the week, with the market seemingly ready for the weekend. After a steady week of rate declines a small flurry of Atlan ...
Friday, 29 May 20
COVID-19: COAL SUPPLY BY CIL TO POWER SECTOR DIPS 22% TO 32 MT IN APRIL DUE TO DEMAND SLUMP - PTI
Over 95% of CIL’s production comes from its 171 open cast mines.
The supply of coal to the power sector by state-owned Coal In ...
Friday, 29 May 20
AUSTRALIA'S NEW HOPE WARNS OF HIT FROM COAL PRICE SLUMP - REUTERS
Australia’s New Hope Corp Ltd said on Thursday that a sudden drop in thermal coal prices and lower output from its Queensland operations woul ...
Friday, 29 May 20
GOVT MAY LAUNCH COAL BLOCKS AUCTION PROCESS UNDER COMMERCIAL MINING ON JUN 11 - PTI
The Centre is likely to launch the process of coal blocks auction under commercial mining on June 11 and around 50 mines are expected to go under t ...
Friday, 29 May 20
KOMIPO ON BEHALF FIVE KOREAN GENCOS INVITED COAL BIDS FOR 5,700 & 4999 NCV COAL FOR AUGUST 2020 LOADING
COALspot.com: South Korea’s Korea Midland Power Co.,Ltd (KOMIPO) on behalf five (5) Korean Gencos has Issued an International Tender for tota ...
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- Sojitz Corporation - Japan
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
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