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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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Thursday, 16 April 20
MARKET INSIGHT - INTERMODAL
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Monday, 13 April 20
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Saturday, 11 April 20
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KNOWLEDGE TO ELEVATE
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Saturday, 11 April 20
KOEN POWER PLANTS INVITED BIDS FOR 1.5 -1.62 MMT OF STEAM COAL
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Friday, 10 April 20
INDIA'S BULKS SUPPLY CHAIN TAKES A HIT DURING LOCKDOWN - WOOD MACKENZIE
India is under a three-week lockdown from 25 March to contain the spread of the coronavirus outbreak. Businesses are shut, and the supply chain is ...
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- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Planning Commission, India
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- The University of Queensland
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
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