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