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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, 04 May 20
U.S. ESTIMATED COAL PRODUCTION FALL 39.4% YEAR ON YEAR IN THE WEEK ENDED APRIL 25 - EIA
Estimated U.S. coal production totaled about 8.6 million short tons (MMst) For the week ended April 25, 2020, says EIA in its latest report.
E ...
Saturday, 02 May 20
SUPRAMAX: ASIA, STRONGER NUMBERS - A 55.000-DWT WAS FIXED FROM INDONESIA TO CHINA IN THE MID $6,000S - BALTIC BRIEFING
Capesize
A tepid week for the big ships, as macro concerns continued to weigh heavily on the index. All of the major voyage routes lost value, ...
Friday, 01 May 20
KOSPO INVITED OFFER FOR 5600 NCV COAL FOR Q3 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 260,000 Metric Tons (MT) steam coal for Boryeong Power ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY ABOUT 8% IN 2020,THE LARGEST DROP SINCE WORLD WAR II - IEA
We expect global coal demand to fall by about 8% in 2020, the largest drop since World War II, with coal use declining in virtually every sector of ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY 8% IN Q1 2020 RELATIVE TO Q1 2019 - IEA
We expect global coal demand to fall by 8% in Q1 2020 relative to Q1 2019. This significant drop was driven by lower demand in the electricity sect ...
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- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- PTC India Limited - India
- Sical Logistics Limited - India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
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