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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, 17 April 20
OPEC BRACES FOR OIL MARKET'S "HISTORIC SHOCK"
OPEC released its much anticipated April monthly report.
Crude Oil Price Movements
Crude oil prices collapsed in March 2020, rec ...
Friday, 17 April 20
SAUDI ARABIA'S MAY 2020 OSPS FOR CRUDE EXPORTS BODE WELL FOR ASIAN REFINERS - WOOD MACKENZIE
On 13 April, Saudi Arabia announced the Official Selling Prices (OSPs) for its May crude oil exports. The new OSPs speak volumes about Saudi Arabia ...
Friday, 17 April 20
SEABORNE COAL PRICES UNDER PRESSURE AS DEMAND SOFTENS IN CHINA, INDIA - CLYDE RUSSELL
Worrying signs are emerging for coal exporters to the world’s biggest markets in Asia, as top buyers China and India move to favour domestic ...
Thursday, 16 April 20
THERMAL POWER SECTOR FACES BLEAK SCENARIO POST-COVID SITUATION - THE HINDU BUSINESS LINE
The centre should take a fresh look at coal-energy value chain as the sector tops the chart on loan defaults.
Covid-19 may have serv ...
Thursday, 16 April 20
CHINA'S BENCHMARK POWER COAL PRICE FALLS 5 YUAN PER TONNE - XINHUA
China’s benchmark power coal price fell by 5 yuan (about 70 U.S. cents) per tonne during the past week.
The Bohai-Rim Steam-Co ...
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- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Bhatia International Limited - India
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- The University of Queensland
- Makarim & Taira - Indonesia
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