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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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Tuesday, 31 March 20
COAL POWER REMAINS IN GLOBAL DECLINE, DESPITE CHINESE SURGE - SYDNEY MORNING HERALD
The impact of coronavirus has prompted a surge in coal-fired power plant construction permits in China, with the Chinese government issuing more pe ...
Monday, 30 March 20
CORONAVIRUS - IMPLICATIONS FOR SHIPS AND CREW - GARD
KNOWLEDGE TO ELEVATE
Countries around the world are strengthening their border control measures in order to prevent the further spread of COVI ...
Monday, 30 March 20
LAY-UP AND RE-ACTIVATION REVISITED - GARD
KNOWLEDGE TO ELEVATE
The COVID-19 pandemic has affected the maritime industry in previously unthinkable ways. Ports around the world are denyi ...
Monday, 30 March 20
PANAMAX: INDONESIA LACKED VOLUME, PARTLY DUE TO FORCE MAJEURE IN INDIAN PORTS - BALTIC BRIEFING
Capesize
As Covid-19 continued to ratchet up tensions across the globe, the Cape market dealt with the change to remote working. Most regions o ...
Saturday, 28 March 20
ASIA'S COAL MARKETS DIVERGE ON QUALITY LINES AS CORONAVIRUS HITS INDIA - REUTERS
Asia’s seaborne coal market is increasingly diverging between higher-quality Australian coal, where prices are holding up despite the economi ...
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- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Planning Commission, India
- White Energy Company Limited
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
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