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