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