Indian Coal Import (Qty MnT)

Copyright © 2021 CoalMint pg. 2

Indian Coal Import (Qty MnT)

FEB'21 MAR'21

Non Coking Coal Coking Coal Pet Coke

Met Coke Total Coal Import

Mundra ParadipGangavaram Krishnapatnam HaldiaDhamraKandla Mormugao Others

2.301.44 1.68 1.55

1.15 1.04 1.020.57 0.60

4.64

2.10 2.00 1.91 1.57 1.41 1.401.00 0.96 0.82

6.71

Ennore

10.2612.68

FEB'21 MAR'21

5.33

6.30

FEB'21 MAR'21

0.15

0.56

FEB'21 MAR'21

0.17

0.21

FEB'21 MAR'21

15.99

19.88

FEB'21 MAR'21


COKING COAL MAJOR RECEIVERS QUANTITY (MT)

RECEIVER FEB'20MAR'21 M-O-M CHANGES

JSW STEEL 1462864 996698 47%

MORMUGAO 742996 489933 52%

JAIGARH 473095 343609 38%

KRISHNAPATNAM 160613 163156 -2%

ENNORE 86160 - N/A

TATA STEEL 1386368 469208 195%

DHAMRA 852529 207511 311%

PARADIP 437769 203397 115%

HALDIA 96070 58300 65%

SAIL 933937 1744642 -46%

HALDIA 336215 662275 -49%

VIZAG 328506 428855 -23%

DHAMRA 180216 338580 -47%

GANGAVARAM 45000 48100 -6%

PARADIP 44000 266832 -84%

RINL 477815 469385 2%

GANGAVARAM 477815 469385 2%

JINDAL STEEL & POWER 302885 391384 -23%

PARADIP 222646 311862 -29%

DHAMRA 80239 79522 1%

BENGAL ENERGY 186297 - N/A

DHAMRA 159297 - N/A

ENNORE 27000

-

N/A

VISA STEEL 172474 77000 124%

PARADIP 172474 77000 124%

SM NIRYAT 157424 11326 1290%

PARADIP 127224 11326 1023%

HALDIA 30200

-

N/A

RAWMET COMMODITY 107000 75500 42%

PARADIP 77788 33500 132%

HALDIA 29212 27000 8%

KRISHNAPATNAM - 15000 N/A

OTHERS 1110202 1094876 1%

Grand Total 6297266 5330019 18%

-

-


NON COKING COAL MAJOR RECEIVERS

RECEIVER M-O-M CHANGES

QUANTITY (MT)

ADANI ENTERPRISES 1562815 1665766 -6%

HAZIRA 439216 224989 95%

KANDLA 328609 92920 254%

DAHEJ 222820 130950 70%

MUNDRA 165000 139978 18%

OTHERS 407170 1076929 -62%

ADANI POWER 1371699 846871 62%

MUNDRA 1371699 846871 62%

SWISS SINGAPORE 810140 457809 77%

KANDLA 565271 292809 93%

GANGAVARAM 160332 - N/A

DHARAMTAR 67357 - N/A

MANGALORE 17180 - N/A

OTHERS - 165000 N/A

AGARWAL COAL 732214 173924 321%

TUTICORIN 188781 - N/A

NAVLAKHI 179200 55724 222%

MAGDALLA 80925 - N/A

GOPALPUR 80872 - N/A

OTHERS 202436 118200 71%

SEMB CORP GAYATHRI POWER 582418 370061 57%

KRISHNAPATNAM 582418 370061 57%

ULTRATECH CEMENT 415954 545525 -24%

GANGAVARAM 252099 193344 30%

PIPAVA 107655 55000 96%

JAKHAU 56200 - N/A

KRISHNAPATNAM - 126641 N/A

KANDLA - 170540 N/A

NAYARA ENERGY 388928 - N/A

SALAYA 388928 - N/A

TATA POWER 334268 154147 117%

MUMBAI 191313 122400 56%

OKHA 142955 31747 350%

RELIANCE INDUSTRIES 327145 80000 309%

BEDI 170495 - N/A

HAZIRA 156650 - N/A

DAHEJ - 80000 N/A

OTHERS 6156103 5967546 3%

GRAND TOTAL 12681684 10261649 24%

FEB'20MAR'21


Australian coking coal prices steady; shipping rates inch higher

INTERNATIONAL

Australian Coking Coal Exports & PricesExports Premium HCC HCC 64 Mid Vol

Australian hard coking coal prices remained steady this week, amid lower price indications and relatively fewer bids.

A pair of spot transactions was concluded earlier this week for premium coking coals. A trade was concluded at $111/t FOB Australia for 75,000 t of Australian premium low-volatile (PLV) with early-June laycan. Another trade was done at $116.75/t FOB Australia for 85,000 t of Australian premium mid-volatile (PMV) with mid-June laycan.

In China, spot activity was thin amid the lack of availability for non-Australian premium coking coals.

In the last week, however, offers for premium hard coking coal had inched slightly higher due to limited tradable resources and growing buying interest from Southeast Asia and India.

The price spread between PLV and PMV hard coking coal has expanded, with FOB prices for premium low vol coals continuing to fall as lower offers failed to draw demand in the spot market, while restocking demand from Indian end-users could lend some support to PMV coals in the near term.

Healthy steel market fundamentals lend support to Indian coking coal and coke prices

Hence, the overall market sentiment for coking coal may stay firmer in April than March because of more procurement activities once mills have consumed existing stocks.

In the Indian market, the downstream steel demand recovery has picked up pace on stronger construction activities. Strong domestic steel and coke prices may lend support to pre-monsoon restocking, as the monsoon season approaches in June-July.

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/t)

FoB

Hay

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109

103

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6.00

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14.00

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18.00

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80

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140

160

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220

Apr'19 Jun'19 Aug'19 Oct'19 Dec'19 Feb'20 Apr'20 Jun'20 Aug'20 Oct'20 Dec'20 Feb'21 Apr'21

Exports Premium HCC HCC 64 Mid Vol


Notably, India's coking coal imports from Australia registered a 19.3% m-o-m growth in the last month of March to 4.26 mn t as compared against 3.57 mn t in February.

Furthermore, the current profit margins in major Indian steel mills are decent, which may support the imported coking coal prices.

Australia-India dry bulk freight rate is currently assessed at $24.55/t (+21.8% w-o-w) for delivery by Panamax vessel class.

For Indian buyers, these prices amount to $134.55/t (+3.4% w-o-w) and $129.55/t (+3.5% w-o-w) respectively on CNF India basis.

Latest prices for the Premium HCC and the 64 Mid Vol HCC grades are assessed at around $110.00/t and $105/t FOB Hay Point, Australia -- both prices having remained unchanged on a week-to-week basis.

Price Assessments

Short-term market outlook for spot buying interest from India appears bleak, as most large steel mills rely on long-term contracts while mid- and small-sized end users are seemingly well stocked for now until May or June as they booked cargoes when prices were low in early January.

Outlook

Hence, overall demand revival for spot purchases of seaborne coking coal by Indian steel mills would likely take a while and is anticipated to start showing signs of improvement in the latter half of the next quarter at the earliest.

Besides, Indian buyers are mostly refraining from immediate procurement of seaborne coking coal cargoes in hopes that offers could decline further.

South Africa: RBCT port to face supply disruption amid Transnet's train derailment

The TFR team is of the opinion that the rail line would be functional either by Friday night or by Saturday morning and the estimated supply loss is 0.5-0.6 mn t. At present, the coal stock at the RBCT port is around 3.3 mn t.

South Africa's Trasnet Freight Rail (TFR) has confirmed derailment of 44 wagons that has damaged 1km of the rail line. The mishap that happened yesterday afternoon resulted in wagons piling upon each other and closure of both the rail lines carrying coal to RBCT port. The expected time of recovery and the assessment of the damage happened is still awaited.

The rail-line disturbance has made already elevated API4 index to move up by $3/t d-o-d basis as the same stood at $89.5/t (yesterday) for May'21 and is expected to shoot up further today.

The South African API4 index that touched the lows of $50/t in May last year due to the pandemic-induced lowered demand has been rallying since the start of 2021. And this increase can be attributed to the supply constraints caused at TFR, rather than any significant improvement in the demand.

TFR's consistent supply disruptions and rising index


Even before lockdown happened in Mar'20, Transnet had been facing unprecedented levels of vandalism and theft of overhead cables that had made the rail line to cancel 170 goods trains a month in Jan'20.

Legacy issues also exacerbated the situation as TFR's spare parts contract with CSR (China South Rail) and CNR (China North Rail) were suspended due to allegations of fraud and corruption, making many locomotives non-functional.

Even before lockdown happened in Mar'20, Transnet had been facing unprecedented levels of vandalism and theft of overhead cables that had made the rail line to cancel 170 goods trains a month in Jan'20.

In January 2021, TFR's coal volume deliveries were affected by a planned supply chain-wide maintenance shutdown, which was immediately followed by disruptions related to the damage caused by excessive rain following tropical cyclone Eloise.

However, yesterday's rail disruption is unlikely to have major impact on Indian buying sentiments in the short-run as Indian importers are already at bay and are delaying their coal purchases amid rising COVID cases, reduced demand from end user-segment, and shut-down of steel plants due to oxygen shortage in the country.

The elevated API4 index and risen freight charges from mid-Feb'21 have already deterred South African coal buying from India. The country's thermal coal import from S.Africa during Jan-Mar'21 have plunged by 42% y-o-y and stood at 6.71 mn t, reveals CoalMint's vessel-lineup data.

Impact on Indian market

NSW (Thermal Coal) 15-17 14-15

Cerrejon (Thermal Coal) 6 4-5

Queensland (Metallurgical Coal) 71-77 70-73

Thermal Coal 24 21

Metallurgical Coal 18-20 14-16

Whitehaven 18.5-19 17.8-18.3

Coal Miners and their Production Target for 2020-21

Previous Guidance Revised Guidance

BHP

Anglo America

Mining giants cut coal production guidance amid supply constraints

The severe storm and floods in Australia last month that even halted loading activities at Newcastle port for few days has made major miners to cut their coal production guidance whereas COVID-19 safeguards measures have also made a few of them to trim their forecast for 2021.

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FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18

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India: Coal Production in Meghalaya

Asper data compiled by COO, the state has report almost nil production in FY'19 and FY'20 .

Government of Meghalaya in a bid to sale the coal extracted in the state has invited interested bidders to participate in the spot auction.

It is pertinent to note that coal mining in Meghalaya has been subjected to various obstacles over environmental concerns.

On 17 Apr '14, National Green Tribunal (NGT) banned illegal coal mining in the state after receiving several petitions regarding acidic discharge from unscientific mines which was polluting the Kopilliriver downstream.


Adani raises cargo lightening charges at Gangavaram and Krishnapatnam port

Production guidance at the NSW operations was dropped to 14-15 mn t from 15-17 mn t. The guidance for Cerrejon was reduced from roughly 6 mn t to 4-5 mn t, the miner said in its quarterly results.

BHP slashes coal production guidance at both the mines

Australia headquartered mining major, BHP has cut its thermal coal production guidance for fiscal 2020-2021 (July-June) on the back of a strike at its Colombian Cerrejon mine and weather impacts in the Australian state of New South Wales, the company said.

Production from the NSW assets stood at 3 mn t in the January-March period, having dropped 22% from a year earlier and having shed 8% q-o-q, BHP said. Cerrejon production stood at 1.8 mn t for the three months to March, which is 9% lower y-o-y, but 417% higher q-o-q basis.

DOMESTIC

Anglo American cuts thermal coal guidance drastically

London headquartered Anglo American, thermal coal production in South Africa decreased by 25% to 3.1 mn t in Jan-Mar'21 quarter, as company's operations were impacted due to second wave of Covid-19 in the country, and also because its Bokgoni pit at Khwezela have been placed on care and maintenance.

The company has cut full-year guidance for metallurgical coal to 14-16 mn t from 18-20 mn t due to the suspension at Moranbah North in Queensland, Australia and geotechnical conditions and delayed access to Grosvenor, also in Queensland.

Reflecting the proposed demerger of the South African coal business, thermal coal guidance has been downgraded to 14 mn t from 24 mn t for 2021, Anglo American said.

In Colombia, company's export thermal coal production decreased by 9% to 1.8 mn t owing to a controlled Covid-19-safe ramp-up following the three-month strike which ended in December 2020.

Whitehaven coal also trims its production guidance

Continued geological challenges at the Narrabri mine have resulted in unscheduled down time and additional longwall equipment repairs, the miner said.

Australia's largest independent miner, Whitehaven has also slashed its annual managed coal sales forecast for the second time in two months, lowering it to a range of 17.8-18.3 mn t from 18.5-19.0 mn t.

The company managed coal production of 4.3 mn t in Q1 2021 against 4.1 mn t in same time last year.

In March, Whitehaven had lowered the range from its initial 19.0-20.0 mn t forecast as torrential rains shut rail networks to a key port in New South Wales, disrupting deliveries.

Australia's largest independent miner, Whitehaven has also slashed its annual managed coal sales forecast for the second time in two months, lowering it to a range of 17.8-18.3 mn t from 18.5-19.0 mn t.

In March, Whitehaven had lowered the range from its initial 19.0-20.0 mn t forecast as torrential rains shut rail networks to a key port in New South Wales, disrupting deliveries.Continued geological challenges at the Narrabri mine have resulted in unscheduled down time and additional longwall equipment repairs, the miner said.

The company managed coal production of 4.3 mn t in Q1 2021 against 4.1 mn t in same time last year.


Implications

As per a Mumbai-based trading house, the rise in cargo lightening charges is likely to incur higher cost to sellers, which will eventually translate into the price to customers.

Further, expectation of more such charges at these ports may also discourage other importers to bring their vessels to these two ports.

Buyers reportedly have stepped back from fresh bookings amid speculations of rise in handling charges and plot rent at the port.

India: Coal's share in energy mix recedes in COVID-hit fiscal

India managed to post a strong end to a difficult year which was over-shadowed by strict COVID-19 norms, but that could not prevent fall in annual electricity generation after continual growth witnessed over the past years.

Data provided by power ministry showed that overall power output including renewable sources dropped to 1380.18 BU in FY '21 against 1389.31 BU in FY '20, in line with the contraction recorded in power demand.

Notably, imposition of lock-down resulted in a decline in power consumption for five straight months up to Aug '20 during which economic activities were slowed down in view of the difficult market conditions.

Outlook

With Adani Ports and Special Economic Zone Ltd (APSEZ) acquiring 58.1% stake in Gangavaram Port, traders are likely to divert their shipments towards Vizag port.

862.02 910.14 951.75 987.68 961.22 950.75

121.38122.38

126.12134.89 155.96 150.3065.78

81.87101.84

126.76 138.34 145.74

37.41

37.92

38.35

37.81 46.47 42.95

87.02

89.71

90.08

88.95 87.32 90.44

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India: Source-wise Power GenerationCoal Hydro Renewable Nuclear Others

Share of coal in annual power generation was reduced by the steady rise in output from renewable sources. However, the decline was limited by lower availability of hydro-power coupled with lessened generation scheduled for nuclear plants.

Overall, coal-fired generation fell for the second straight year to 950.75 BU, whilst its contribution in total output was recorded at 68.9% in FY '21 against 69.2% in FY '20.

Amendment to MMDR Act: Coal sales from captive mines to attract additional premium

The amendment proposes to allow captive coal miners to sell up to 50% of their production after meeting the requirements of end-use plant and on paying additional royalty to the state government.

Indian government recently introduced the Mines and Minerals (Development and Regulation) Amendment Bill, 2021 in order to bring structural changes in the coal mining sector by eliminating the distinction between captive and non-captive miners.

Earlier, the owner of the coal mine for specified end-use was not allowed to sell coal in open market. Later, relaxation was provided by allowing sale of 25% of coal from captive mine though a provision announced on Feb '19.

However, it was clarified that such sale would not be allowed from the coal mines allotted to a company that has been awarded a power project on the basis of competitive bid for tariff (including Ultra Mega Power Projects).

Recovering from the tepid beginning to the fiscal, coal-fired power rose for seven straight months starting Sep '20 which coincided with electricity demand returning to growth.

In particular, a late resurgence was seen in Mar '21 where demand increased due to sharp rise in temperature compared to the previous year when the first phase of intense lock-down resulted in a dramatic fall in power usage.

Power generation by coal-fired plants registered a robust growth of 32% to 99.86 BU during the month, thereby enhancing coal's share in energy mix to 76% in the final quarter.

Rally towards the final quarter:

While the trend is expected to continue in the new fiscal, a lot would depend upon the criticality of COVID situation as possibility of fresh restrictions pose a major threat to the economic revival and thereby power demand.

Additional amount payable for coal sale:

The additional amount varies on the basis of which the coal mine was allocated. The same has been tabulated below for ready reference.

Apart from maximising output from captive mines, the amendment intends to generate extra revenue from such sale in addition to royalty or payment to the District Mineral Foundation and National Mineral Exploration Trust or any other statutory payment.

1Equivalent to 200% of the royalty payable.

2Captive coal and lignite mines allocated through allotment route

Equivalent to the royalty payable

3Captive coal and lignite mines allocated through auction route

Equivalent to the royalty payable

4For captive coal and lignite mines that were auctioned and allotted with condition allowing sale of coal up to 25% of annual production:

(a) Sale of coal up to 25% of annual production Payable as per the condition mentioned in the tender document.

(b)Sale of coal more than 25% and up to 50% of annual production

Equivalent to 50% of the royalty payable

Captive coal and lignite mines, auctioned for power sector through reverse bidding under the Coal Mines (SP) Act, 2015.

Condition Additional AmountS.No.

In case of central public sector enterprises, the period of mining leases, other than the mining leases granted through auction, would be extended on payment of an additional amount equivalent to the royalty payable for coal/lignite mines.

Moreover, the government has made an effort to expedite mining operations by providing a provision for extension of mining leases.



International Non - Coking Coal Average Prices (CFR India) Country/Grade

South Africa 6000 NAR

South Africa 5500 NAR

Indonesia 4200 GAR

Indonesia 3600 GAR

Mar'21 Feb'21 Jan'21

Australian Premium HCC Monthly Average Price

CIL Performance in March 2021

FoB

Pri

ces

in U

SD

Mar'20 Apr'20 May'20 Jun'20 Jul'20 Aug'20 Sep'20 Oct'20 Nov'20 Dec'20 Jan'21

160.50

135.31

113.13 111.50

112.45

107.28

121.00123.42

102.50 101.30

123.00

141.78

116.57

88.0094.00

100.00106.00112.00118.00124.00130.00136.00142.00148.00154.00160.00166.00172.00

Feb'21 Mar'21

112.1 101.96 103.87

91.0 81.9 83.2

55.5 51.1 57.1

44.0 40.7 41.5

26.40

17.70

11.108.70 8.40

6.00

2.800.00

14.30 14.00

10.40

7.505.80 5.00

2.800.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

SECL MCL NCL CCL WCL ECL BCCL NEC

Production Offtake


International Non-Coking Coal FOB Prices (Average)

South Africa (6000 NAR)

South Africa (5500 NAR)

Indonesia (4200 GAR)

Indonesia (3600 GAR)

4549535761656973778185899397

Jun’20 Aug’20 Sep’20 Feb’21Mar’20 Apr’20 May’20 Jul’20 Oct’20 Nov’20 Dec’20 Jan’21 Mar’21

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Coal Market Scan

Australian premium hard coking coal FoB price has been sliding down progressively, on limited deals as buyers waited on the sidelines despite adequate availability.

Indonesian thermal coal prices increased by 4.7% in March in line with rising global coal prices, while South African index increased by 11.5% in March amid growing supply concerns at RBCT port.

What Happened

Coking coal market fundamentals remain negative with thin buying interest, as buyers turned cautious amid uncertainties over the near-term demand outlook.

Indonesian thermal coal prices would rise amid increasing demand from China, while South African prices would remain elevated till the Transnet's rail issue is resolved.

What may Happen

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