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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, 09 April 20
SUSPENSION OF WRONGFUL TRADING IN LIGHT OF COVID 19 - WF&W
KNOWLEDGE TO ELEVATE
DIRECTORS’ PERSONAL LIABILITY FOR WRONGFUL TRADING – RELIEF DURING THE CORONAVIRUS CRISIS
As the UK&rsquo ...
Wednesday, 08 April 20
LESSONS LEARNED FROM SCRUBBER INSTALLATION AND OPERATION - ABS
KNOWLEDGE TO ELEVATE
At the beginning of this year, the IMO’s global sulfur cap on marine fuels entered into force and shipowners who ch ...
Wednesday, 08 April 20
MARKET INSIGHT - INTERMODAL
With lockdown measures around the globe tightening during the last weeks of Q1, there is finally a feeling that most countries are slowly but stead ...
Tuesday, 07 April 20
SHIPPING MARKET ANALYSIS - ALLIED
With the first quarter of 2020 now firmly written in the books, it is worth examining what we have witnessed so far in the tanker market. Undoubted ...
Tuesday, 07 April 20
IS CHINA EMBARKING ON A MAJOR EXPANSION OF COAL-FIRED POWER GENERATION? - WOOD MACKENZIE
As energy companies worldwide grapple with the economic impact of the coronavirus pandemic, long-term planning continues. Ahead of the release of t ...
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- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Planning Commission, India
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
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