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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, 25 May 20
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
Non-OPEC oil supply continued to increase by 2.0 mb/d in 2019, driven by US shale production, which rose by 1.7 mb/d, amounting to 84% of total non ...
Sunday, 24 May 20
A 63,000 FIXED DELIVERY VIETNAM TRIP VIA INDONESIA REDELIVERY KOSICHANG AT $8,500 - BALTIC BRIEFING
Capesize
After a week of bounce momentum the market appears to have stalled out once again. The Capesize 5TC has more than doubled since last F ...
Saturday, 23 May 20
COLOMBIA COAL OUTPUT DOWN 7.2% IN Q1 ON LOW PRICES, CORONAVIRUS LOCKDOWN - REUTERS
Coal production in Colombia, the world’s fifth-largest coal exporter, fell 7.2% in the first quarter because of low prices and coronavirus qu ...
Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd (EWP) has Issued an International Tender for total Max 840,000 Metric Tons of min 5 ...
Thursday, 21 May 20
KOMIPO INVITED BIDS FOR TOTAL 610000 MT OF LCV AND HCV COAL FOR 2H 2020
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) has Issued an International Tender for 130,000 mt of 5700 NCV coal an ...
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- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
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- Thai Mozambique Logistica
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- White Energy Company Limited
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
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- ASAPP Information Group - India
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- PTC India Limited - India
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- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
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- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
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- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
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- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
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- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
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- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- The University of Queensland
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
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- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
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- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
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- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
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- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
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- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
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- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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