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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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Tuesday, 12 May 20
CAN INDONESIA'S COAL INDUSTRY SURVIVE COVID-19? : IEEFA
Pandemic Lockdown and Slumping Prices Put Extreme Pressure on Coal Miners
Executive Summary
While attention has been focused on th ...
Tuesday, 12 May 20
INDIA'S COAL PRODUCTION TO CLOCK RECORD 700 MILLION TONNES IN FY21: COAL SECRETARY - PTI
Coal Secretary Anil Jain said FY20 coal production was lower than the target of 660 million tonnes because of flooding of a key coal mine.
&nbs ...
Monday, 11 May 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Monday, 11 May 20
CORONAVIRUS PUTS MORE THAN A THIRD OF SEABORNE COAL SUPPLY AT RISK - WOOD MACKENZIE
The full impact of the coronavirus outbreak on the global economy is yet unclear. However, the demand destruction is already becoming evident, with ...
Saturday, 09 May 20
ANGLO AMERICAN CONSIDERS SPINNING OFF SOUTH AFRICAN COAL OPERATIONS - REUTERS
Diversified miner Anglo American said on Thursday it prefers unbundling and listing its thermal coal operations in South Africa on the Johannesburg ...
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- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
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- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
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- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- The University of Queensland
- Minerals Council of Australia
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
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