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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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Friday, 01 May 20
LUKOIL SHARES LUBRICANT EXPERIENCE AFTER FIRST 100 DAYS OF OPERATION ON VLSFO
KNOWLEDGE TO ELEVATE
After 100 days of VLSFO operation, LUKOIL Marine Lubricants is sharing recent experience on VLSFO operation with NAVIGO M ...
Wednesday, 29 April 20
OIL CLOSES IN ON PEAK OVERSUPPLY - WOOD MACKENZIE
Are we now deep in the abyss? Up to our necks in it, if the oil price is any guide. Brent has now tested sub-US$20/bbl in this downturn and WTI sub ...
Monday, 27 April 20
INCIDENT INVESTIGATION: SEARCH FOR THE CAUSE, NOT THE VILLAIN - GARD
Incident investigations often conclude with placing the blame for an incident on the crew. Causes of the incidents are usually identified as proced ...
Monday, 27 April 20
A 58,000DWT VESSEL WAS FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY WC INDIA, AT $4,500 - BALTIC BRIEFING
Capesize
The tide turned this week for the Capesize market, as voyage rates registered dramatically falling fuel costs. This was led primarily ...
Sunday, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
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- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
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