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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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Friday, 29 May 20
DRY BULK SHIPPING: NO QUICK RECOVERY FOR THE DRY BULK MARKET AS COVID-19 DIGS DEEPER
The outlook is poor for dry bulk, as the negative demand shock and overcapacity come together to send rates to multi-year lows, even a return to wo ...
Thursday, 28 May 20
COVID-19: A FORCE MAJEURE EVENT? - KYPRIANOU
KNOWLEDGE TO ELEVATE
While seeing the unexpected COVID-19 outbreak expanding worldwide and the first cases being identified in Cyprus, the com ...
Thursday, 28 May 20
OIL DEMAND RECOVERED BY 20% IN MAY AGAINST APRIL: RUSSIAN ENERGY MINISTER - TASS
Oil demand remains at a low level but the demand in May increased by 20% against April, Russian Energy Minister Alexander Novak said, cited by the ...
Thursday, 28 May 20
MARKET INSIGHT - INTERMODAL
Earlier in May, China’s top leaders convened for the annual National People's Congress, following over two months of delays due to the co ...
Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
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- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
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- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
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- Eastern Coal Council - USA
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- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
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- San Jose City I Power Corp, Philippines
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- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
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- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
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- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
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- Kalimantan Lumbung Energi - Indonesia
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- ICICI Bank Limited - India
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- Therma Luzon, Inc, Philippines
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- SMC Global Power, Philippines
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- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
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- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
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- VISA Power Limited - India
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
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- Meralco Power Generation, Philippines
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- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Economic Council, Georgia
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- New Zealand Coal & Carbon
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- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
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- Wilmar Investment Holdings
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- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
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- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
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- Chettinad Cement Corporation Ltd - India
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- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
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