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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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Wednesday, 01 April 20
TRADERS SCRAMBLE TO SELL CHEAP CRUDE CARGOES AS GLUT GROWS - REUTERS
Oil traders across the globe are offering cargoes far in advance as rapidly vanishing demand drives key physical crude prices to multi-decade lows, ...
Wednesday, 01 April 20
MARKET INSIGHT - INTERMODAL
There is an old, allegedly Chinese, saying suggesting that living in “interesting” times usually refers to times of trouble. The latest ...
Tuesday, 31 March 20
FREIGHT MARKET: DRY BULKERS - SPOT MARKET 23-29 MARCH 2020
Capesize
The rebound in freight rates resumed this past week, with rates man-aging to post further gains by week’s end. The BCI is in negat ...
Tuesday, 31 March 20
DRY BULK: Q1 HAS BEEN THE WORST QUARTER NOTED FOR MORE THAN 3 YEARS NOW - ALLIED RESEARCH
At this point, the Covid-19 pandemic seems to be monopolizing all market (as well as all other) discussions across the world and any market insight ...
Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
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- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Planning Commission, India
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
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