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