May 2021 Price: 40/w h e r e s e r v i c e a n d d e d i c at i o n j o i n h a n d s
Vol. L No. 02
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CCAI Monthly Newsletter 2021 1 Published on :May 28.05.2021
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From the Editor’s Desk
Notwithstanding the global outcry to reduce the carbon footprints in the environment and in turn reli nquish coal usage, the world’s most abundantly used dry fuel is here to stay for dec ades to come, especially for its easy availability and comparatively affordable cost. The world’s prime coal produc ers are currently planning as many as 432 new mine projects with 2.28 billi on tonnes of annual output cap acity, a recent research shows. While the Inte rnational Energy Agency has call ed for making a giant leap toward net zero emissions, world's major coa l pro ducers plan to expand their cumulative cap acity nearly 30% by 2030. Chi na, Australia, India and Russia account for more than three quarters of these new projects.
In India, the second-largest coal-producing and -consumin g country on ear th, coal continues to be the king despite its growing adoption of solar, wind and other clean energy technolo gies. Aided by the country's dec ision to award landmark supply contracts for flexible renewable power, bids for new solar projects had hit record lows last year. The development affi rms that coal is no longer the cheapest source of electricity here. But while the renewable ene rgy industry endured a turbule nt 2020 due to the onslaught of coronavirus pan demic, coal remains the dom inan t player in India’s electricity mix. With the pow er demand expected to increase threefold by 2040 as India’s population continues to achieve upward mobility, the dry fuel is poised to see continued growth even as the clean energy market thr ives.
Since last year, the Indian Gov ernment has sought to boost the domestic coal mining sector with a series of commercial auctions. The Gov ern ment has now dubbed the second tranche of commercial auction held in Mar ch’2 1, a significant success which is reflected in around 50 mine specific ten der doc uments being purchased by bidders so far. While national miner Coal Ind ia Limited has maintained its output and despatch momentum for the second mo nth running in the current fisca l, another major producer Singareni Collieries Company (SCCL) has also ach ieved considerable growth in April this year in term s of coal production, dispatch es and overburden removal. It would be interesting to see how the country with four th highest coal reserves in the world, strikes a balance between its age-old coal sect or and the costcompetitiveness of renewable energy alternatives so that bot h sectors may proliferate hand in hand in the coming decades.
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Content Vol. L No. 02 May 2021
Official Organ of the Coal Consumers’ Association of India. Disseminates News and Views on Coal and all other sources of Energy. 4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in
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27 Monthly Summary Of
Imported Coal &Petcoke
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Production And Offtake Performance Of Cil And Subsidiary Companies
30 Overall Domestic Coal Scenario
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CONSUMERS’ PAGE 1. Request for allowing temporary change in mode of coal supply from Road to Rail for the willing consumers of CIL due to resurgence of COVID-19 cases:
lower turnout of vehicles and scarce workforce.
Transportation of coal by Road mode have been severely affected since Match’21 as Transport vehicles, truck drivers, helpers and workforce required for loading and unloading of coal are hardly available to execute the operations due to the resurgence of pandemic and pocketed lockdowns imposed by different state governments.
Considering the situation, CIL has provided extension in lifting period and date of payment deposition of coal value till 15th June 2021 so far.
Request has been made to CIL to allow temporary change of supply mode for coal transportation from Road to Rail for the willing consumers (both FSAs and e- Auctions) for their Monthly Scheduled Quantity from April to September 2021.
Request has been made to CIL to extend the lifting period and payment of coal value for the RDOs ending in April & May’21 till June end (30.06.2021) for both Power and NRS consumers against FSA and eAuction quantities.
3. Submission for refunding of Evacuation Facility Charges (EFC) in case of despatches through rapid loading arrangements:
2. Request for providing extension of timeline for lifting of coal and date of payment for deposition of coal value under various RDOs:
It has been pointed out consumers that they have to remit Evacuation Facility Charges at the standard rate of Rs. 50 per tonne along with the coal value while receiving despatches from SECL's Junadih sidings through Silo loading, which is a form of rapid loading. However, as per CIL notification dated 19th December 2017, Evacuation Facility Charges (EFC) are not applicable for coal despatches through rapid loading arrangements.
Coal transportation through Road mode has become extremely difficult since the upsurge in Covid-19 infections, as transporters and operators and coal handling workers are getting infected in large numbers causing
Request has been made to SECL to ensure that the amount remitted by consumers in terms of EFC may kindly be refunded at the earliest in case of despatches through rapid loading arrangements..
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4. Submission for early issuance of long-pending credit notes and coal value reconciliation for Road- mode consumers of SECL:
cant grade slippage started reoccurring in the rakes supplied from ECL’s Salanpur and Mugma sidings where grade variation to the tune of 4-6 grades could be observed. This led to massive financial loss to the Power sector consumers.
Delay in reconciliation of excess coal value against quantity despatched through Road mode by SECL is causing a large amount of fund of the consumers to be stuck for a long period. Also, a significant number of credit notes are due to be issued by SECL despite rigorous follow-ups by the consumers.
Representations were given to ECL, CIL and the Ministry of coal so that measures could be taken to ensure supply of requisite grade as per FSA to the customers of ECL.
Request has been made to SECL to take necessary action for timely issuance of pending credit notes and reconciliation of coal bills pertaining to despatch through Road mode at the earliest possible.
Issues faced exclusively by Power sector consumers: 5. Request for reassessment of mines at Salanpur and Mugma areas of ECL due to consistent and significant grade slippage: The issue of grade slippage from various sidings of ECL has been occurring since a long time. In spite of certain improvement in the quality of coal supplied from ECL during February-March’21, the issue of significant grade variation again started occurring in coal supplied from various collieries of Salanpur and Mugma areas of the Subsidiary to the tune of 4 to 8 grades during March-April’21, which has led to enormous financial loss for the consumers. Request has been made to ECL and CIL to ensure supply of FSA grade of coal those collieries of ECL. Also, the coal controller is requested to conduct reassessment of ECL mines in Salanpur and Mugma area which may help in determining the actual grades of coal in those areas.
6. Submission by Power Sector consumers regarding huge grade slippage in coal supplied from specific ECL sidings: Despite temporary improvement in the quality of coal supplied to the Power Utilities from various ECL sidings during February-March’21, the issue of signifi-
ECL said that a detailed enquiry has been conducted into the matter and necessary action has been taken on those responsible. Also, measures like Quality Awareness Fortnight 1.0 and 2.0, regular area visits and strict vigil on third party sampling have been implemented in order to mitigate the reoccurrence of grade slippage.
7. Submission by Power Sector Consumers of Raigarh area regarding allocation of coal under the dispensation of SHAKTI Policy, Para B (viii) (A) short term from nearby sources: Power Utilities having their plants in the vicinity of Raigarh area in Chhattisgarh have stated that they have been offered coal in the previous tranches of SHAKTI (B) (viii) from far off mines (100-150 kms away by Road) from the Power generating plants. CIL’s decision to offer coal under Shakti (B) (viii) has helped the power plants but increased the price of coal due to increased transport cost. Request has been made to CIL so that the cluster of Power plants present near Raigarh area could be provided coal from nearby sources by the Subsidiaries such as Baroud OC, Chaal OC and Bijari OCP of SECL and Kulda and Garjanbahal OCP of MCL.
8. Request for not calculating compensation towards short-lifting for deemed delivered quantity against carry forward rakes of Power Utilities: In spite of the provision of carry forward the lapsed rakes which could not be supplied to the Power sector consumers due to production issue/Railway constraints, Utilities procuring coal from SECL stated that due to continued demand-supply mismatch and Railway constraints including unavailability of rakes, backlog of carry forward rakes have continued to ac-
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cumulate. Thus, the consumers are not getting the quantities allotted to them for long while the advance coal value submitted by them is stuck with the coal company for an indefinite period which leads to significant financial loss. Request has been made to SECL and CIL to ensure that the carry forward rakes may be supplied to the concerned consumers on time so that their requirement of coal could be fulfilled and financial loss may be minimized. The carry forward rakes which are not supplied to the generators because of production issue / Railway constraints are not taken in the calculation of compensation for short-lifting against deemed delivered quantity.
Issues faced exclusively by Non power sector: 9. Submission regarding invoking of general Force Majeure allowing cancellation of rakes by NRS consumers during COVID period: Due to huge pendency of rakes in the Non-lapsable category, NRS consumers procuring coal from various Subsidiaries of CIL have not been receiving rakes which were pending since FY 2019-20 in spite of high demand at their end. However, during the lockdown period, those long-pending rakes were being allotted to the NRS consumers in large numbers as demand in the Power sector waned down. Many NRS consumers were forced to cancel the rakes as their plants were either shut down or running at low capacity during the lockdown period. As a result they were heavily penalized by certain Subsidiaries for non/short-lifting. Even rakes cancelled in April, May & June, 2020 (lockdown period) have been considered while calculating this penalty for the FY 2019-20 as these rakes were scheduled to be supplied within FY 2019-20, which could not be done within stipulated time. Requests have been made to MoC and CIL so that, zzSubsidiaries may be allowed to invoke general Force Majeure for waiver of performance related obligations during national lock down period i.e. 24th March to 31st May, 2020. zzSubsidiaries may allow waiver of all forms of penalties imposed on the consumers for Non- performance during the Pandemic-induced lockdown period.
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zzTermination of FSAs may not be imposed for rakes being cancelled during the national lockdown.
10. Submission by NRS consumers regarding deferment of rakes from NCL through Dhanbad Division of East Central Railways: NRS consumers procuring coal from Northern Coalfields Limited (NCL) through Dhanbad division of East Central Railways are not in a position to receive the rakes allotted to them as coal handling workers are hardly available at the plant ends. Therefore, they have requested the Railways to defer the rakes till the pandemic situation improves. However, Railways have suggested them to cancel the rakes as per norms. Request has been made to CIL and NCL to consider taking the matter with the Railways like the previous year so that deferment of rakes may be allowed to those consumers, who are unable to receive rakes until the condition improves..
Issue related to Railways: 11. Request for considering Actual Tare Weight instead of current practise of Stencilled Tare Weight of Rakes: In case of weighment of older wagons, actual tare weight may be more than the stencilled weight because of repairing, weathering, deposition of coal dust and extraneous material etc. which add to the weight of the wagons. Since for calculation of net weight of coal the designed tare weight is considered in the RR, this tare difference leads to significant over-charging of freight as well as coal value for quantity of coal not delivered to the buyers. Request has been made to the Railway Board to consider actual tare weight of the empty wagons measured in the real time basis for calculating the quantity of coal loaded in wagons and provide bidirectional weighment facilities in the weighbridges by modifying or replacing the old ones. Also, the tare weight of the empty wagons in the inmotion weighbridges should be measured during the time of their placement so that time taken for the tare weight does not affect the free loading time.
CCAI CCAIMonthly Monthly CCAI Monthly Newsletter Newsletter Newsletter September November April May 2021 2019 2020
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POWER India adds 12.1 GW power generation capacity in FY21: Report India added 12.1 gigawatt (GW) power generation capacity in 2020-21, of which 7.7 GW was from renewable energy sources, according to a report. India's total power generation also increased by 1.3 per cent in FY21 despite pandemic restrictions, driven by a post-lockdown surge in electricity demand. The share of RE in the energy mix was 10.1 per cent, up from 9.4 per cent in FY20. India's RE sector, particularly the solar, has shown resilience in FY21 despite supply chain disruptions caused by the COVID-19 pandemic. While a handful of developers continue to dominate auctions, new market entrants are giving them competition by bidding aggressively. These include large public sector companies
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such as NTPC Ltd, SJVN Ltd and Coal India, as well as smaller, private developers and international developers such as Al Jomaih Energy and Water Co.
Recovery in energy demand to continue despite COVID-19 led temporary blip: Ind-Ra India Ratings and Research (Ind-Ra) has said the recovery in energy demand will continue despite COVID-19 led temporary blip. India Ratings and Research (Ind-Ra) has published the May 2021 edition of its credit news digest on India’s power sector. Ind-Ra estimates, as per a statement, the allIndia energy demand would decline in May 2021 on a month-on-month basis, despite the peak summer season, and to remain below prepandemic levels.
This is on account of the continuation of COVID 19 led restrictions put out by certain states till May 31, 2021. With COVID cases peaking in May and announcements by certain states to open up from June, Ind-Ra expects energy demand to start recovering from June 2021. The electricity generation increased 42.5 pe cent y-o-y to 115.5 billion units in April 2021 (March 2021: up 23.5 per cent), supported by 55.4 per cent y-o-y growth in thermal generation (up 29.2 per cent y-o-y), although hydro generation fell 18.4 per cent y-o-y (down 7.8 per cent y-o-y). Electricity generation from renewable sources increased 17.9 per cent y-o-y to 11.7 billion units in April 2021, with solar generation increasing 41.5 per cent y-o-y. .
Power ministry asks states to issue FY22 tariff orders Reminding state electricity regulators to abide by the provisions of the Electricity Act, 2003, the Union power ministry has asked a number of states to issue tariff orders for FY22 “at the earliest” for their power distribution companies (discoms). Irregular tariff revisions limit the discoms’ ability to become financially viable, which in turn, leads to delayed payment to power generators and makes it difficult to maintain and upgrade their own network and systems. “Some of the SERCs are issuing tariff orders regularly in every financial year whereas some of the other SERCs are not strictly adhering to the provisions of the Act for timely issuing of the tariff orders,” the power ministry’s letter said. The recipients of the letter include major power consuming states such as Uttar Pradesh, Tamil Nadu, Chhattisgarh, Karnataka, Rajasthan, Madhya Pradesh, Punjab, Telangana and West Bengal. The Centre has also asked the states to restrict the creation of fresh “regulatory assets” and allow the carrying costs to discoms for past regulatory assets. Major states which have already issued the tariff orders for FY22 include Maharashtra, Andhra Pradesh, Gujarat, Assam, Haryana, Bihar, Odisha and Kerala.
India likely to get third power exchange owned by PTC, BSE by year end Power regulator Central Electricity Regulatory Commission (CERC) has approved registration to PTC, BSE and ICICI Bank-led Pranurja Solution Ltd to start the country's third power exchange. Senior officials in the company said the exchange is likely to be operationalised by this year-end. The commencement of operation of the power exchange is subject to approval of the bye-laws, rules, and business rules and the technology including trading software in accordance with various provisions of the Power Market Regulations (PMR) 2010. On complying with the conditions, the registration of the power exchange will be in force for 25 years from date of commencement of operation, it said. PTC India and BSE Investments Ltd own 22.62% each in Pranurja Solutions while 9.04% is held by ICICI Bank Ltd. In addition, there are 14 other investors including Greenko Energy, Jindal Power, Manikaran Power and Mercados Energy Markets, each of whom is having shareholding less than 5%.
Power industry seeks relaxation of fly ash disposal norms With demand for fly ash coming down from cement and brick manufacturing units, power plants have requested the Union ministry of environment, forest and climate change not to impose financial penalties if they are unable to utilise all the fly ash produced from power generation. Thermal plants are supposed to utilise 100% of fly ash from the fourth year of operation. Over 25% of fly ash produced from power plants is used by the cement industry. Bricks and tile makers consume about 10% and another 10% is utilised for making roads and flyovers. More than 5% of the fly ash is used for the reclamation of low lying areas. CCAI Monthly Newsletter May 2021
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The 101 power plants monitored in FY20 generated 226 million tonnes of fly ash in the fiscal, of which, 83% could be utilised. Of these, 47 plants had achieved 100% utilisation while the utilisation of another 14 units ranged between 90% and 100%. “The requirement of 100% fly ash utilisation may be waived for FY21 and FY22 and no financial penalties should be imposed on thermal power plants during this period,” APP requested.
Ladakh gets Centre's nod for transmission lines at cost of Rs 1,310 cr The central government has approved intrastate transmission works at a revised cost of Rs 1,309.71 crore to link far-flung villages of Ladakh to the grid and phase out DG sets towards achieving carbon neutrality in the Union Territory, a top official said. The project on completion would also provide the army and the far-flung villages with clean power round the clock, he added. Lt Governor R K Mathur said the intra-state transmission works have been sanctioned by the Union Ministry of Power and include 220 KV S/C transmission lines of D/C tower (total 307 km), including Kargil-Padum (Zanskar) (207 km) and Phyang to Diskit (Nubra) (100 km) and two 220/33 KV Grid substation one each at Diskit, Nubra (50 MVA) and Padum, Zanskar (50 MVA) with an outlay of Rs 1,309.71 crore. These transmission lines will link far-flung villages to the Grid and phase out DG sets used in far-flung villages, thus taking one more step towards achieving Carbon Neutrality in Ladakh. This will also provide the Army and far-flung villages with clean power round the clock.
Covid-19: Uttar Pradesh govt decides not to increase electricity tariff in state In view of the Covid situation, the Uttar Pradesh government has decided not to increase the prices of electricity in the state. In a meeting
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with key officials, chief minister Yogi Adityanath directed them to ensure that there is no increase in electricity prices this year. The direction comes at a time when the Uttar Pradesh Electricity Regulatory Commission is in the midst of preparing the tariff based on the annual revenue requirement (ARR) filed by the Uttar Pradesh Power Corporation. Earlier, in February this year, the five power distribution companies (discoms) of UPPCL — Madhyanchal, Paschimanchal, Poorvanchal, Dakshinanchal and KesCo — had filed their annual revenue requirement (ARR) proposal to the UP Electricity Regulatory Commission, projecting a total revenue requirement of Rs 81,901 crore during 2021-22. It included an estimated expenditure of Rs 62,020 crore on the purchase of 1,20,043 million units (MUs) of electricity during the year.
India ranks third in Renewable Energy Country Attractiveness Index India moved up a position to the third spot in EY’s Renewable Energy Country Attractiveness Index as a result of an exceptional performance on the solar PV front and with generation from solar forecast to exceed coal before 2040. The US retains top position on the Index and is expected to hold its position under President Biden. China has remained a buoyant market and maintains second position, adding 72.4 GW of new wind power in 2020, the report added. The event will engage the leaders to help shape the global, regional and local agenda in the energy sector including Power, Energy Transition, Oil & Gas, Renewables, Coal, Digital Transformation among others. The report said that India’s solar sector is expected to grow significantly post the COVID-19 pandemic, with generation from solar PV forecast to exceed coal before 2040, driven by the government’s policy ambitions, which has led solar PV to be the most cost-competitive source of power in the region and improving further with the passage of time.
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Over Rs 9,000 crore worth of renewable energy certificates sold in India till 20th May : Report India's renewable energy certificate (REC) market has recorded net sales worth Rs 9,266 crore during its decade of existence, according to a study released by the CEEW-Centre for Energy Finance (CEEW-CEF). It added that India's 27 RPO under-compliant states would have needed to buy an additional 67.2 million certificates in 2020 if they had chosen only to use RECs to meet their targets -total REC issuances between 2011 and 2020 amounted to just 70.6 million. According to the study, solar projects account for as few as 16 per cent of all RECs issued to power generators. Discoms, the largest consumers of solar power in India, account for a mere 12 per cent of the total REC issuances.
Deadlines extended for green energy projects amid Covid restrictions The Centre has granted time extension to renewable energy projects scheduled to be commissioned on or after April 1 on account of resurgence of Covid-19 and subsequent lockdowns and restrictions in many states. The actual quantum of time-extension shall be decided in due course depending on the pandemic situation in the coming weeks, it said. The implementing agency will not initiate coercive action on the project for recovery of penalty on delayed commissioning till the time-extension request is decided upon.
Renewables accounted for 64 per cent of generation capacity addition in FY21: Report Renewable energy (RE) dominated power generation capacity addition in financial year 202021 (FY21) and accounted for 7.7 gigawatt (GW)
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about 64 per cent, of the 12.1 GW added, according to a latest report. The report, however, added that coal capacity addition fell only by a marginal 6 per cent in FY21 compared to the previous fiscal year. It added that the announcement of basic customs duties on solar cells and modules drove up auction tariffs by 11 per cent in the fourth quarter (Q4) of FY21. While tariffs discovered in solar auctions held in Gujarat rose from a historic low of Rs 1.99 per unit in December 2020 to Rs 2.20 per unit in March 2021. A basic customs duty of 45 per cent on solar modules and 20 percent on solar cells will take effect in April 2022.
India added 2,105 MW grid-connected solar capacity in Q1 2021: Bridge to India India added 2,105 megawatt (MW) of gridconnected solar power generation capacity in the first quarter (Q1) of 2021, as the first wave of COVID-19 subsided and construction pace picked up gradually. This took the total installed capacity to 44,241 MW by 31 March 2021, according to a recent report. The report said that utility-scale solar installations increased by more than 33 per cent quarter-on-quarter (q-o-q) in Q1 2021. According to the report by renewable energy consultancy Bridge to India, the new capacity addition was split between utility-scale solar and rooftop solar, at 1,735 MW and 370 MW, respectively. Construction activity is expected to pick up pace in Q3 2021, with capacity addition expected at 2,470 MW. It added that the total commissioned utilityscale, rooftop solar and off-grid solar capacity stood at 35,939 MW, 7,162 MW and 1,140 MW respectively. The total project pipeline stood at 52,392 MW as on 31 March 2021.
Govt sanctions 19,000 solar street lights for Jammu and Kashmir The Union Ministry of New and Renewable Energy (MNRE) has sanctioned 19,000 solar street lights (SSLs) to Jammu and Kashmir, where the J&K Energy Development Agency (JAKEDA) has already installed 2,200 such lights so far, officials said. The SSL project has a central financial support of Rs 42.06 crore against the total project cost of Rs 47.84 crore with the remaining project cost of Rs 5.78 crore to be provided by the Union Territory. As many as 285 SSLs have been installed in Reasi, 206 in Kishtwar, 230 in Ramban & other districts of Jammu division. A total of 565 SSLs in Kulgam, 499 in Anantnag, 159 in Bandipora and other districts of Kashmir division have also been installed, after following all standard operating procedures relating to the COVID-19 pandemic.
Nuclear Power Corp to spend Rs 18,000 cr on capital expenditure in FY22 Atomic power generation company Nuclear Power Corporation of India Ltd (NPCIL) plans to spend about Rs 18,000 crore as capital expenditure this fiscal, said top company official. He also said the first pour of concrete for the construction of two more 1,000 MW units (Units 5 and 6) at Kudankulam is expected to happen this year and the 700 MW unit at Kakrapar Atomic Power Station (KAPS) will begin
commercial generation in September 2021. According to him, the major on-going projects are the construction of two 1,000 MW units (Units 3 and 4) at Kudankulam in Tamil Nadu, four 700 MW units -- two each at Rajasthan Atomic Power Station (RAPS - Units 7 and 8) and KAPS (Units 3 and 4). These apart, 10 more indigenously designed 700 MW units will be set up in a fleet mode and NPCIL is preparing the different sites to house them. The 10 units are planned to be completed progressively by 2031 involving an outlay of Rs 1,05,000 crore with per MW cost estimated at about Rs 15 crore.
Gujarat tops wind power capacity addition in 2020-21 Gujarat continues to be the preferred destination for setting up wind power projects in India. Despite the challenges posed by the Covid-19 pandemic, Gujarat witnessed the highest addition of wind power generation capacity in the country in 2020-21. Wind power projects with the cumulative generation capacity of 1,020.3MW were installed and commissioned in Gujarat from April 2020 to March 21. Gujarat was followed by Tamil Nadu (303.7MW) and Karnataka (148MW). In fact, Gujarat grabbed the lion’s share of 68% in the new wind power capacity addition across the country in 2020-21. About 1,503.3MW of new wind power generation capacity was installed in India in fiscal 2021, IWTMA data shows.
DOMESTIC Coal India retains production and offtake momentum in May Despite COVID-19 restrictions in several states, Coal India maintained its output and despatch momentum in May, the second month of the current fiscal, an official said. The mining major is likely to report dry fuel production of around 41.7 million tonnes and offtake of nearly 55 million tonnes this month as against production of 41.43 million tonnes and sales of 40 million tonnes in the corresponding period last year, the official said. In April, coal production stood at 41.9 million tonnes compared to 40.4 million tonnes in the year-ago period, recording a growth of 3.7 per cent. Offtake stood at 54.1 million tonnes during the reporting month compared to 39.1 million tonnes in the corresponding period last year, registering a growth of 38.4 per cent. Coal India had recently said that the pandemic had impacted production on account of a large
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number of the companys employees across subsidiaries and contractors testing positive for coronavirus. The Kolkata-based company commenced FY22 with a pithead stock of nearly 99 million tonnes. However, electricity demand had risen in recent months and the contribution of thermal power had improved, boosting demand for coal.
Coal India, EMIL and Adani coal project contribute to India’s rising coal production 2020 was a tumultuous year for everyone. The economy suffered greatly as industries grinded to a halt. However, certain sectors held up better than the rest and even showed stable performances. One such sector is the Indian coal mining. Coal India Ltd(CIL), the largest coal-producing company in the world, accounts for almost
82% of the total production with the rest contributed by the Vedanta, Emil, DilipBuildcon and Adani Coal Project. Coal production in India was 730.87 million tonnes in 2019-20 as compared to 728.72million tonnes in 2018-19, which shows a modest growth of 0.30%. Out of total, CIL produced 602.15 MT in 2019-20 despite the pandemic. It had previously recorded 606.89 MT. While most MDO companies have recently entered the coal industry, their coal projects have been churning out impressive figures. For example, EMIL produced an impressive 11.44 MnTe of coal just a year after it commenced operations. Similarly, Adani’s Parsa East & Kanta Basan coal block has a peak capacity of 15 MMTPA. One can certainly expect the Adani coal project to pump out huge numbers too.
Coal India carbon emissions less than 1 per cent of India's in FY20 State-owned Coal India Ltd has said that the PSU accounted for only 0.65 per cent of the country's total carbon dioxide (CO2) emissions of 2,616 million tonnes (MT) during FY2019-20. Coal India (CIL) said that this is according to the data sourced from Global Carbon Project: Carbon Di-Oxide Information Analysis Centre, of the US. A back-of-the-envelope calculation estimates 30 kg of CO2 emission for every tonne of coal produced. With CIL's opencast output at 572 MT, during FY20, a little over 17 MT of CO2 equivalent was emitted out of CIL's coal mining operations, compared to the country's total of 2,616 MT. Pollution arising out of coal mining operations is not much compared to burning of the fossil fuel, from where major emissions emanate.
CIL to continue with fuel supply to power plants under import substitution
of coal to the power plants under import substitution in the ongoing fiscal. The development assumes significance in the wake of the PSU earlier stating its drive for coal import substitution has gained tempo with consumers opting for about 90 million tonnes (MT) of indigenous coal in FY'21. "The issue of supply coal in the FY 2021-22 was deliberated during the sub-group meeting...chaired by Joint Secretary, Ministry of Coal, wherein it has been decided to continue the supply of coal to the power plants under import substitution mechanism for FY 2021-22," Coal India Ltd (CIL) said in a notice. CIL further said that the PSU and the Central Electricity Authority (CEA) have been directed to put notice asking to submit the requirement for 2021-22. "Power utilities desirous of procuring domestic coal in lieu of imported coal are hereby requested to submit their...requirements of coal for FY 2021-22," the notice said.
SCCL registers growth and supplies more coal than ever before The Singareni Collieries Company achieved considerable growth in April this year in terms of coal production, dispatches and overburden removal in spite of disruptions due to the Covid pandemic. During April 2021, the state-owned mining company transported 54.43 lakh tonnes of coal, a growth of 79.11 per cent when compared to 30.4 lakh tonnes in April last year, and coal production was at 48.56 lakh tonnes, up 61.9 per cent over 30 lakh tonnes in April last year. Similarly, this April, it managed to achieve 347 lakh cubic metres of overburden removal compared to 272.2 lakh cubic metres in April last year, a growth of 27.5 per cent. As against sales of coal of Rs 1,201 crore last year in April, this year it achieved a sale of ₹1,693 crore, registering a growth of 41 per cent.
State-owned CIL will continue with the supply CCAI Monthly Newsletter May 2021
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2nd Tranche of commercial coal mines auction gets tremendous response: Govt The Centre said the second tranche of commercial coal mines' auction has received tremendous response which is reflected in around 50 mine specific tender documents being purchased by bidders till date. Moreover, many other prospective bidders are in the process of registration and purchase of tender documents from the auction portal, the coal ministry said in a statement. The bid submission date has been extended to enable interested parties travel to mine locations for inspection once the lockdown curbs are removed in states, it added. In March, India launched the second tranche of auction for commercial coal mining, offering 67 mines for sale. Coal Minister Pralhad Joshi launched the auction process in a programme held in New Delhi
Mining, construction equipment industry may grow by 15-20% in 2021: ICRA ICRA has said the mining and construction equipment industry is likely to grow by 15-20 per cent the calendar year 2021 but stressed that the economy, in the grip of a pandemic, could throw up sudden negative surprises. The first quarter of 2021 is estimated to have reported a strong equipment demand growth of 45-50 per cent, ICRA said in a statement. "Following a 10-12 per cent contraction in CY2020, dragged down primarily by the 39 per cent decline in H1 CY2020, the mining and construction equipment (MCE) industry is poised to grow by 15-20 per cent in CY2021 (5-10% in FY2022)," it said. However, the economy in the grip of a pandemic could throw up sudden negative surprises, as
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witnessed in April 2021, when demand was relatively subdued. While overall equipment demand will be strong in 2021, partly due to the low base of 2020, volatility in demand is likely, with a strong first quarter, a relatively subdued second quarter in the grip of the second wave, and the emission related pre-buy pick-up and post-buy slump in the third and fourth quarter of 2021.
India's coal import likely to be subdued in coming months: mjunction India's coal import is expected to be subdued in coming months on account of various factors like prevailing Covid situation, high coal stock in the system and higher international prices, according to mjunction. mjunction -- a joint venture between Tata Steel and SAIL -- is a B2B e-commerce company and also publishes research reports on coal and steel verticals. The country's coal import fell 12.62 per cent to 215.92 million tonnes (MT) in FY21 from 247.10 MT in FY20, according to a provisional compilation by mjunction services, based on monitoring of vessels' positions and data received from shipping companies. "The overall decline in coal imports during the year 2020-21 was on expected lines. In coming months, import demand is likely to be subdued in view of the surge in COVID-19 infections, high coal stock in the system and high prices prevailing in the international market," mjunction services MD and CEO VinayaVarma said. India's coal import in March 2021 was at 19.79 MT as against 19.87 MT imported in the same month a year ago, mjunction said. For the financial year 2020-21, total coal and coke imports stood at 215.92 MT, about 12.62 per cent lower than 247.10 MT imported during FY20.
railways
Indian Railways induct 100th WAG 12000 HP locomotive In a boost to the ‘Make-in-India’ initiative, Railways have inducted the 100th 12000 HP WAG locomotive manufactured by Madhepura Electric Locomotive (MELPL) at one of India’s largest integrated greenfield manufacturing facilities. These locomotives are state of the art IGBT based, 3 phase drive and 12000 horsepower electric locomotive which will help to decongest the saturated tracks by improving the average speed and loading capacity of freight trains. With twin Bo-Bo design having 22.5 tonnes) axle load and upgradable to 25 tonnes with a design speed of 120 kmph, these electric locomotives are playing a key role in revolutionizing the freight movement in the country. It will help to decongest the saturated tracks by allowing faster, safer and heavier freight trains to move across the country, as well as improve the loading capacity. “So far, these e-locos have traversed across all railway divisions and are performing well. We look forward to more such delivery milestones,” a railway statement said.
SHIPPING
Gain for shipping players as Baltic Dry index touches 10-year high With the Baltic Dry Index having hit a 10-year high recently, Indian shipping companies are not just benefitting from the high freight but also from increased trade with Bangladesh and Vietnam, industry experts said. “Construction activity has picked up significantly in Bangladesh as the country is focusing on infrastructure growth. Due to this, Indian ship-
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ping companies are witnessing increased cargo volumes with a lot of bulk raw material getting shipped. This is going to be a long-term trend as infrastructure push is expected to continue,” Captain Rahul Bhargava, chief operating officer (COO) at Essar Shipping said. Shipping Corporation of India (SCI), Great Eastern Shipping, Tolani Shipping, and Essar Shipping are into bulk carriers along with other segment fleets in the domestic market. “All vessels on spot charter will earn more and most companies keep a combination of spot and contracted vessels. So, the benefit would vary depending upon the portfolio,” said Anil Devli, chief executive officer (CEO) at Indian National Shipowners’ Association.
STEEL
Govt ready for another cut in import duty on steel to tame prices The government has proposed to slash import duties on steel items further bringing it to zero or near zero levels to provide relief to MSMEs, which have been hit hard by the high cost of raw materials amidst the raging pandemic. Top government sources said that a decision had been taken to review duties on steel products and reduce it or withdraw it completely on few items to help the user industry hit hard by rising price of the metal in the domestic market. Also, lower import duties would help maintain supply lines that have been affected with several domestic steel companies reducing steel production to divert medical grade oxygen for Covid-19 relief measures.
Industry body IPMA seeks govt intervention to regulate rising steel prices Industry body Indian Pipe Manufacturers’ AsCCAI Monthly Newsletter May 2021
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sociation (IPMA) has sought government intervention to regulate the prices of steel, which are trading at an all-time high in India. In a letter to Union Steel Minister Dharmendra Pradhan, the body has also sought a temporary ban on its export, a move which will prevent steel players from diverting their produce to the international markets.
switched to using lower priced imported coal and benefitted from lower-cost inventories and a lag in adjustments in freight costs.
“Pipe manufacturers and MSMEs are struggling for a long time due to increased prices and shortage of steel in the domestic market. We had approached your (Steel Minister) office, requesting your kind intervention for regulating prices and imposing a temporary ban on steel export,” the letter dated May 20, 2021 said.
As costs head north, cement makers switch to cheaper fuel
CEMENT Indian cement makers' price hikes to support margins: Fitch Ratings The recent price increases by India's cement companies will counter the higher energy costs, Fitch Ratings said. Besides, the impact on their profitability from a resurgence of the coronavirus is likely to be limited, it said. Fitch expects cement demand to be less affected by the restrictions to curb the spread of Covid-19 this time around, while the larger cement companies' strong profitability in the financial year ended March 31, 2021 (FY21) should cushion their financial profiles against downside risks. "Key energy commodities, including petroleum coke, imported coal and diesel, which together account for more than 50 per cent of cement makers' costs rose sharply, particularly after Q3FY21," it said. However, the impact on cement companies' costs was less apparent in Q4FY21 as they
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"The fresh curbs to contain the resurgence of coronavirus in India after March 2021 are more localised," the ratings agency said.
Rising commodity prices are likely to hit the cement sector hard. The cost of imported petroleum coke (petcoke), a key input, has more than doubled to around $130 per tonne on a yearon-year basis. This steep surge is a result of higher sea freight and supply-side constraints. Add to this a 37% year-on-year increase in diesel prices, which translates into elevated freight costs. Power and fuel expenses account for 2530% of the sector’s total operating cost, so operating margins are under threat. To tackle this, cement companies are using more coal instead of petcoke. On a year-on-year basis, the price of thermal coal has risen by 82% to nearly $100 per tonne, but it remains a cheaper alternative. In the March quarter, the fuel mix of UltraTech Cement Ltd between petcoke and imported coal stood at 30% and 60%, respectively, compared to 77% and 10% last year. Also, the company has increased the share of green power from 11.5% last year to 12.3% in the financial year 2021. For peer Dalmia Bharat Ltd, petcoke accounted for 52% of its fuel mix in the March quarter of FY21 versus 70% in Q3FY21. The company expects the share of alternative fuels to increase from 8% in FY21 to 15% in FY22. Coal accounted for 40% of its fuel mix in FY21. Among regional companies, south-based Ramco Cement Ltd cut its petcoke usage from 48% in FY20 to 41% in FY21. Petcoke usage in Q4FY21 was just 23% versus 66% in the same quarter of the previous year, its management said.
GLOBAL Coal industry sees relevance in tech embraced by Paris climate agreement The coal industry is betting it can survive the decarbonization of electricity and industry and keep fossil fuels in the mix by leaning on carbon-capture technology, the head of the World Coal Association told Reuters. Such methods are a key part of the Paris Agreement on climate change, said the organisation's chief, Michelle Manook, and will help keep coal relevant as governments and companies quicken efforts to cut emissions that are warming the planet and polluting the world's densely populated cities. "Go back to Paris," Manook said in a passionate defence of coal. "Go back to the International Panel on Climate Change and they have been really clear and consistently saying that we are
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not going to get there without CCS." Policies that exclude coal are not helpful, Manook said, adding that "CCS is a proven technology. We know it can be applied." He said though CCS is expensive at present, the costs would come down with economies of scale and that governments needed to provide strong policy support to give companies the confidence to invest in such projects.
Asia snubs IEA's call to stop new fossil fuel investments Asian energy officials have disputed the International Energy Agency's (IEA) call for no new oil, natural gas and coal investments for the world to be able to reach net-zero carbon emissions by 2050, viewing that approach as too narrow.
The IEA, which has previously championed the oil and gas industry, this week outlined a path to net-zero emissions that suggested stopping new investments in oil, gas and coal supply, retiring coal-fired plants in advanced economies by 2030, and banning sales of new internal combustion engine cars by 2035. Energy companies in Australia, the biggest carbon emitter per capita among the world's richest nations, and officials in Japan and the Philippines said there were many ways to get to net zero. Japan has said that report provides one suggestion as to how the world can reduce greenhouse gas emissions to net zero by 2050, but it is not necessarily in line with the Japanese government's policy while Australia said there was "no one size fits all" for decarbonisation as IEA report doesn't take into account future negative emission technologies and offsets from outside the energy sector. .
In climate push, G7 agrees to stop international funding for coal The world’s seven largest advanced economies have agreed to stop international financing of coal projects that emit carbon by the end of this year, and phase out such support for all fossil fuels, to meet globally agreed climate change targets. In a communique, the Group of Seven nations - the United States, Britain, Canada, France, Germany, Italy and Japan - plus the European Union said "international investments in unabated coal must stop now". Getting Japan on board to end international financing of coal projects in such a short timeframe means those countries, such as China, which still back coal are increasingly isolated and could face more pressure to stop. "work with other global partners to accelerate the deployment of zero emission vehicles", "overwhelmingly" decarbonising the power sector in the 2030s and moving away from international fossil fuel financing, although no specific
date was given for that goal. They reiterated their commitment to the 2015 Paris Agreement aim to cap the rise in temperatures to as close as possible to 1.5 degrees Celsius above pre-industrial times and to the developed country climate finance goal to mobilise US$100 billion annually by 2020 through to 2025.
Record CFR China coking coal premium to FOB slips back Chinese coking coal import prices have hit record premiums above $140/t above fob Australia prices this month as China's ban on Australian supplies lifted prices for non-Australian origin cargoes. But the gap has begun to narrow with mine maintenance expected to tighten fob supplies. The Argus assessment for fob Australia premium hard coking coal tumbled more than $37/t, or 27.6pc, a month after the ban. But it has since erased earlier losses and increased to $150.85/t fob Australia ahead of scheduled maintenance at mines. The Argus assessment for premium hard coking coal on a cfr China basis rose by 86.1pc from $146.50/t cfr as Chinese buyers switched to Canadian and US coal with limited options following the import curb. The cfr-fob spread for tier-one premium low-volatile hard coking coal widened to a record $143.30/t on 18 May from $10.50/t on 1 October 2020. The gap has narrowed to $123.15/t after a 40.8pc rise in fob prices
China’s Australian distorts prices
coal
ban
China's ban on Australian coal imports is distorting thermal coal trade flows and creating unprecedented price imbalances in the market as the high demand summer season approaches. The situation has resulted in prices of low-calCCAI Monthly Newsletter May 2021
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orific value (CV) Indonesian coal rising above higher-CV Australian material, an unprecedented situation that will likely cause problems for Chinese buyers during the summer months when air-conditioning rises sharply and pushes up power demand. India has become a crucial market for Australian coal after China, the world's largest coal importer, last year imposed an informal ban on Australian imports following calls by Canberra for an investigation into the origins of Covid-19. The Chinese demand outlook for domestic coal remains firm, despite a steep decline in the Chinese futures market last week, with the high demand summer season approaching. Prices of Indonesian GAR 4,200 kcal/kg coal were last assessed by Argus at a 10-year high of $55.98/t fob Kalimantan in May, around 25pc higher than the start of the year, with the increase largely driven by strong Chinese demand. In contrast, higher quality Australian NAR 5,500 kcal/kg prices were assessed on the same day at $55.36/t FOB Newcastle, up by just 14¢/t on the week, with declining demand from India on a severe Covid-19 outbreak
Adani coal contractor asks Australian government for insurance help A rail contractor to Adani Enterprises Ltd's giant Australian coal project has asked the government for help to obtain insurance that it has not been able to secure from markets, a submission to a parliamentary inquiry showed. BMD Constructions Pty Ltd is building a section of a 210 km (130 mile) rail line that will service Adani's controversial Carmichael mine in northern Queensland state, which is due to start operations later this year. Global insurers, along with banks and other industries, have come under pressure from shareholders and climate activists to stop facilitating fossil fuel mining projects. BMD, in a submission to an inquiry into regula-
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tion of investment in Australia's export industries, said it has not been able to obtain public liability insurance, environmental protection insurance or director and officer insurance. .
US thermal coal exports poised to grow in coming months of 2021 US thermal coal exports in the first quarter totalled 9.4 million mt, up from 7.5 million mt in the same period last year. According to a European source, "a significant increase in US exports is looming." US export prices have also increased, though to a lesser extent. On May 28, Platts assessed FOB Baltimore, basis 6,900 kcal/kg NAR, at $75/mt, up from $56.50/mt a year ago, and FOB New Orleans, basis 6,000 kcal/kg NAR, at $53.05/mt, up from $43.15/mt last year. Regarding the possibility of whether the rally in coal prices will hold, or a crash is coming, a second US-based coal consultant said he remembered 2007, but adding that the current scenario might be different. "In 2005, China became for the first-time a net importer of coal, and so the global coal market shifted and there was a big run-up in pricing," said the second consultant. "This time seems more like a short-term demand spike due to supply having trouble catching up."
US met coal miners expect more upside US coking coal producers say spot prices have yet to hit a ceiling, despite the lull in China, as buyers digest surging offer levels and plans by top economic planning body the NDRC to stabilise steel and iron ore prices. While last week's US low-volatile offers approaching $300/t cfr China and a dip in Chinese steel prices has checked buying, suppliers and buyers say demand is unchanged.
Mongolian exports to China are still affected by Covid-19 restrictions at the Ceke and Ganqimaodu border posts, while US, Canadian and Russian alternatives to Australian coal have covered just over half of China's regular imports. China imported 14.74mn t of coking coal in JanuaryApril, down from 27.08mn t a year earlier. Chinese mills have also looked to domestic mines to supply some of their needs. But a supply gap remains, and this is reflected in the rise in US prices since the second half of last year. Premium low-volatile US coals, such as Oak Grove and Blue Creek 7, are a natural fit for China and have led the increase in prices. The rise in Atlantic low-volatile coking coal prices has extended to US high-volatile material since late last year.
Coal Shipments to Power Sector at Lowest Level in 14 Years in USA Shipments of coal to U.S. power plants in 2020 fell 22% year-over-year, according to data released May 13 by the U.S. Energy Information Administration (EIA). The agency said the U.S. power sector received 428 million short tons (MMst) of coal last year, the lowest amount since the EIA began publishing shipment data in 2007.
Coal miner Cerrejon to halt operations after blockades cut gasoline supplies Colombian coal mine Cerrejon will halt operations because of two blockades that have prevented from it bringing in supplies of gasoline, the latest trouble for the major miner. Cerrejon, jointly owned by BHP Group, Anglo American Plc and Glencore Plc, has had repeated disagreements with nearby Wayuu indigenous communities and its largest union, which held a three-month strike last year. "Cerrejon is currently suffering two blockades, led by people unconnected to the company, which have impeded the transport of coal and the delivery of water to communities and made the arrival of essential supplies for mining operations impossible," the company said in a statement. Cerrejon produced 12.4 million tonnes of coal in 2020, down almost 52% from 2019, and its exports fell to their lowest level in the past 18 years amid coronavirus restrictions and falling global demand for coal.
European Union's green push targets shipping emissions
The EIA said the COVID-19 pandemic was partly to blame for the drop, as demand for electricity fell nationwide. The agency in April reported that U.S. energy consumption in 2020 fell 7% year-over-year, which it said “marked the largest annual decrease in U.S. energy consumption in both percentage and absolute terms in our consumption data series that dates back to 1949.”
The European Union's ambition to go carbonneutral by 2050 means slicing greenhouse emissions from shipping by 90 percent as part of a far-reaching plan to shake up the maritime economy.
The report also pointed to the ongoing decline of U.S. coal-fired power generation; federal data shows about 9.5 GW of coal-fired generation was shuttered nationwide last year, the fourthhighest total since 2009. The EIA last year said about 25% of the nation’s coal-fired generation capacity was retired in the past decade, including 48 GW of capacity between 2016 and 2020.
A recovery in big economies from the coronavirus pandemic this year and next means seaborne freight -- handling 80 percent of the volume of the world's trade in goods -- is starting to expand rapidly.
Maritime transport accounts for 2.5 percent of greenhouse gas emissions globally and 13 percent of emissions from the EU's transport sector, according to the Commission.
The European Commission hopes to counter the increase in emissions with a plan to encourCCAI Monthly Newsletter May 2021
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age the EU's 27 member states and the bloc's neighbours to invest in sustainable solutions, such as more efficient propulsion systems, slow steaming and weather routing. By doing so, it hopes to grab the initiative from the UN's International Maritime Organization, whose own global plan along the same lines is perceived as too slow and inadequate to meet the goals of the Paris Agreement on climate change.
Putin’s Russia is betting coal still has a future The project to modernize and expand railroads that run to Russia’s Far Eastern ports is part of a broader push to make the nation among the last standing in fossil fuel exports as other countries switch to greener alternatives. The government is betting that coal consumption will continue to rise in big Asian markets like China even as it dries up elsewhere. “It’s realistic to expect Asian demand for imported coal to increase if conditions are right,” said Evgeniy Bragin, Deputy Chief Executive Officer at UMMC Holding. “We need to keep developing and expanding the rail infrastructure so that we have the opportunity to export coal.’’ The latest 720 billion ruble ($9.8 billion) project to expand Russia’s two longest railroads — the Tsarist-era Trans-Siberian and Soviet BaikalAmur Mainline that link western Russia with the Pacific Ocean — will aim to boost cargo capac-
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ity for coal and other goods to 182 million tons a year by 2024. Capacity already more than doubled to 144 million tons under a 520 billion ruble modernization plan that began in 2013. Putin urged faster progress on the next leg at a meeting with coal miners in March.”
Poland to take over coal assets from its utilities in 2022 The Polish government will complete its takeover of coal assets from state-run utilities PGE, Enea and Tauron in the second or third quarter of 2022, a draft document published by the state assets ministry said. Poland generates most of its electricity from polluting coal, but under rising pressure from the European Union and with carbon emission costs surging, it has encouraged more investment in low emission sources. The government plans to take over the coal assets owned by its utilities, except from hard coal mines, and then transfer them to a new stateowned company. The coal assets are associated with high levels of debt and their continued use has weighed on the financial results of the state-run energy groups. Officials have said the industry needs a new model to help it fund green projects as banks have shied away from backing coal-dependant companies.
MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Indicative Imported Coal Price COAL South Africa South Africa Australia Indonesia Indonesia
(kcal/kg) 6000 NAR 5500 NAR 5500 NAR 5000 GAR 4200 GAR
Monthly Price - FOB USD92.90 USD 66.26 USD 57.25 USD 69.65 USD 55.15
Monthly Price- FOB INR 7646 INR 5320 INR 4255 INR 5670 INR 4026
Monthly Change (USD) 11.84 6.62 1.04 8.02 5.80
Indicative Pet Coke Price PET COKE
Sulphur
Price
India-RIL (Ex-Ref.) Saudi Arabia (CIF)
-5% + 8.5%
INR 11357 INR 9180($126)
Monthly Change ($) INR 154.00 1.50
USA (CIF)
- 6.5%
INR 9746($134)
2.25
Exchange Rate
Change (Monthly)
INR 73.00
-1.57
Indicative Coking Coal Price Current Month Monthly Change (USD)
Premium Low Vol FOB CFR China 126.19 261.63 16.34
39.31
HCC 64 MID Vol Semi Soft Low Vol PCI Mid Tier PCI MET COKE 62% CSR FOB Aus CFR China FOB Aus FOB Aus FOB Aus CFR India FOB N China 116.13 235.75 101.47 107.84 106.84 376.13 418.75 11.06
28.13
South African Coal News: *A prolonged slump in Indian coal demand threatens a recent recovery in South African prices. Any demand slump from India’s sponge iron industry will weigh heavily on South African coal imports, given buyers typically favour Richards Bay coal over other origins owing to its high fixed carbon content. South African coal exports to India declined by 4.8mn tonnes or 11.5%, in the year to 36.8mn tonnes in 2020. * South African bank-Ned bank will restrict total financing in aggregate for coal mining firms and infrastructure and trade related to thermal coal to less than 1% of its total advances, with this decreasing to 0.5pc by 2030. The bank will also not provide funding for any new coal-fired power plants, regardless of technology or jurisdiction. *South African miner Buffalo Coal Corporation has considerably narrowed its margin of loss for the first three months of 2021 compared to the corresponding period of 2020 as demand of power in the coal reliant nation has increased significantly
0.03
0.81
0.81
11.25
69.75
in 2021 after the low demand in the previous year due to lockdown.
Australian Coal News:
*Australian coal exports have continued to steadily rise in value since overcoming China’s ban on the commodity last year, data from the Australian Bureau of Statistics (ABS) has revealed. Coal exports in April 2021 increased by $287 million, 8% higher when compared with the previous month. This was partially driven by coal exports to India, which increased significantly ($116 million) in April. * Australian coal industry continues to suffer as insurers and financial service providers distance themselves from projects amid pressure from climate campaigners. Adani's controversial Carmichael coal mine in Australia along with miners New Hope Corp and Whitehaven Coal has asked the government for help to take out insurance after failing to secure coverage.
CCAI Monthly Newsletter May 2021
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*Bolstered by the increased demand for Asian met coal, Australian PLV FOB price has hit 3 months high this week. Despite China’s ban on Australian coal its demand in the coal consuming nations in Asia and Europe has helped the country to keep its price steady.
Indonesian Coal News:
*Indonesia's state-owned electricity distributor Perusahaan Listrik Negara (PLN) has pledged to stop building coal plants by 2023 after finishing the 35 gigawatts (GW)-worth of projects it had in the pipeline. PLN also plans to implement co-firing at 52 coal plants across the country by 2025 to reduce emissions. It has so far begun co-firing at 11 coal power plants. * Indonesia says it will stop building new coal-fired power plants after 2023 to meet its carbon-neutral goals — but more than 100 plants are to be built by then. State-owned electricity utility PLN has said there would be no more new thermal plants after an ongoing program to add 35,000 megawatts (MW) to the national grid powered mostly by coal is completed. *Indonesia's state-owned electricity distributor Perusahaan Listrik Negara (PLN) has pledged to stop building coal plants by 2023 after finishing the 35 gigawatts (GW)-worth of projects it had in the pipeline. PLN also plans to implement co-firing at 52 coal plants across the country by 2025 to reduce emissions. It has so far begun co-firing at 11 coal power plants.
US Coal News:
*US coking coal producers are hopeful that spot prices have yet to hit a ceiling, despite the lull in China, as buyers digest surging offer levels and plans by top economic planning body the NDRC to stabilise steel and iron ore prices. While last week's US lowvolatile offers approaching $300/t cfr China and a dip in Chinese steel prices has checked buying, suppliers and buyers say demand is unchanged. * The US Energy Information Administration (EIA) has revised up this year’s thermal coal export outlook by 19% from last month’s forecast amid gradual economic recovery in consuming nations and high gas prices. The latest forecast of 32.3 million metric tonnes represents 32% increase from 2020. * Coal production in the US is expected to be nearly MMst (million short tons) in 2021, which is 9% higher than 2020’s production while coal fired generation in the country is expected to increase 13%. However,
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the coal market in the United States is expected to decline with a compound annual growth rate of more than 3% between 2020-2025.
Pet Coke News: * Import of Mediterranean pet coke has become subdued owing to multi-year high prices. The inflated price can be attributed to both lack of demand in most petcoke-buying regions and an ongoing supply constraint. As a result, imports and stocking are coming to an end unless the situation can rectify itself in the coming months. * Due to scarce supply, US Gulf Coast petcoke prices have gone up this week. The price for FOB USGC high sulfurpetcoke has steadily marched higher since June 3, 2020. This hike in price has been primarily due to a lack of spot material due to lower refinery output caused by a drop in demand for refined products due to COVID-19 related economic restrictions. *Import of Mediterranean pet coke has become subdued owing to multi-year high prices. The inflated price can be attributed to both lack of demand in most petcoke-buying regions and an ongoing supply constraint. As a result, imports and stocking are coming to an end unless the situation can rectify itself in the coming months.
Shipping Update:
*Australian port owner NSW Ports will raise fees at Port Kembla in southern New South Wales (NSW) from 1 July. But the increase may be outweighed by a planned cut by the operator of the coal terminal as it is looking to reduce its fees by 15-20% or around $1/t from the same period to reduce cost pressures on the struggling coking and thermal coal industries. * India’s shipping ports are struggling amid a manpower shortage and reduced working arising from varied stages of pandemic-related lockdowns across different states in the country, prompting some to declare force majeure. In the fiscal year ending March 2021, major state-owned ports witnessed a 4.6% fall in cargo throughput to 672.6m tonnes, according to the Indian Ports Association (IPA). The shipping companies have also seen a drop in cargoes coming into the country since the last lockdown in March 2020. * Members of the Joint Baltic Exchange have pointed out that while the freight market is strong and has clients wanting to invest, there are question-marks hanging over any potential deals amid the pandemic situation. The owners have been deterred from being the first.
PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES COAL PRODUCTION (Figs in Mill Te) MAY'21
SUB CO.
APR'20 - MAY'21
ACTUAL THIS YEAR
ACTUAL SAME PERIOD LAST YEAR
ECL
2.80
3.40
-17.30
BCCL
2.10
1.60
35.20
ACTUAL SAME PERIOD LAST YEAR
% GROWTH
5.80
6.80
-15.40
4.10
3.30
24.70
% ACTUAL GROWTH THIS YEAR
CCL
4.20
2.90
45.30
9.00
5.20
74.90
NCL
9.20
9.20
0.40
17.80
17.90
-0.70
WCL
3.60
3.90
-8.30
7.30
7.40
-1.80
SECL
9.20
9.10
0.70
18.50
18.40
0.40
MCL
10.90
11.20
-3.10
21.50
22.70
-5.40
0.00
0.00
84.00
81.80
NEC CIL
0.00 42.10
41.40
1.70
2.60
OFFTAKE (Figs in Mill Te) MAY'21
SUB CO. ACTUAL THIS YEAR
ACTUAL SAME PERIOD LAST YEAR
APR'20 - MAY'21 % ACTUAL GROWTH THIS YEAR
ACTUAL SAME PERIOD LAST YEAR
% GROWTH
ECL
3.80
3.40
13.50
7.90
7.10
12.20
BCCL
2.70
1.30
114.50
5.20
2.30
129.00
CCL
6.50
4.00
62.20
13.10
7.00
88.60
NCL
9.70
8.20
18.80
19.10
15.30
24.70
WCL
5.80
3.10
89.20
11.40
5.90
94.40
SECL
13.30
9.90
34.50
26.20
19.60
33.60
MCL
13.30
10.30
29.40
26.10
21.90
19.30
0.00
0.10
55.10
40.00
37.60
109.10
79.10
NEC CIL
0.00
37.90
CCAI Monthly Newsletter May 2021
| 29
Overall Domestic Coal Scenario Coal Production (in MT) Company CIL SCCL
April, 2021 41.89 4.86
April, 2020 40.41 3.00
% Growth 3.7% 61.8%
April- March, 2021 596.25 50.58
April- March, 2020 602.14 64.02
% Growth -1% -21.0%
Overall Offtake (in MT) Company
April, 2021
April, 2020
% Growth
April- March, 2021
April- March, 2020
% Growth
CIL SCCL
54.1 5.44
39.09 3.04
38.4% 79.1%
573.80 48.51
581.41 62.47
-1% -22.3%
Coal Despatch to Power (Coal and Coal Products) (in MT) Company
April 2021
April 2020
% Growth
April- March, 2021
April- March, 2020
% Growth
CIL SCCL
42.48 4.48
31.66 2.86
34.2% 56.7%
445.69 40.90
465.72 52.92
-4% -22.7%
Company
Coal Qty. Allocated April 2021
Coal Qty. Allocated April 2020
Increase over notified price
Coal Qty. Allocated April- March 2021
Coal Qty. Allocated April- March 2020
Increase over notified price
CIL
2.53
2.14
24%
42.51
29.83
25%
Spot E-auction of Coal (in MT)
Special Forward E-auction for Power (in MT) Company
Coal Qty. Allocated April 2021
Coal Qty. Allocated April 2020
Increase over notified price
Coal Qty. Allocated April- March 2021
Coal Qty. Allocated April- March 2020
Increase over notified price
CIL
2.19
3.04
18%
39.33
27.12
8%
Exclusive E-auction for Non- Power (in MT) Company
Coal Qty. Allocated April 2021
Coal Qty. Allocated April 2020
Increase over notified price
Coal Qty. Allocated April- March 2021
Coal Qty. Allocated April- March 2020
Increase over notified price
CIL
10.35
3.91
10%
31.23
8.03
13%
Company
Coal Qty. Allocated April 2021
Coal Qty. Allocated April 2020
Increase over notified price
Coal Qty. Allocated April- March 2021
Coal Qty. Allocated April- March 2020
Increase over notified price
CIL
0.01
0.15
15%
3.45
1.04
13%
Special Spot E-auction (in MT)
Special Spot E-auction For Coal Importers Company CIL
Coal Qty. Allocated April 2021 0.06
Coal Qty. Allocated April 2020 0.00
30 | CCAI Monthly Newsletter May 2021
Increase over notified price 10%
Coal Qty. Allocated April- March 2021 7.53
Coal Qty. Allocated April- March 2020 -
Increase over notified price 18%
CCAI Monthly Newsletter May 2021
| 31
REGISTERED
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