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