Coal Demand Supply Outlook in India Factoring coal sourcing, logistics, opportunities and strategies

Transcription

1 Coal Demand Supply Outlook in India Factoring coal sourcing, logistics, opportunities and strategies December 2013 E-REP Outlook Series Copyright 2013, All rights reserved

2 Coal Demand Supply Outlook in India 2 Research Base Research Base 954 MT India is expected to have a coal demand of 954 MT by Nuclear 2 % Coal has been the mainstay of Indian economy since the advent of industrial activity in India. From electricity generation to steel production and cement manufacturing to other industrial applications, coal is the key industrial engine driver. Core industries - crude oil, petroleum refining, coal, electricity, cement and finished steel have a combined contribution of about quarter in the index of industrial production and are therefore, indicators of present and future outlook of industrial activity. Exhibit 1: Percentage Share of Coal Based Capacity in Total Installed Capacity of India (FY 12) Hydro 20 % Renewable 12 % Exhibit 2: Sector-wise Coal Consumption in India (MTs) CAGR = 9.06% 134 Diesel 1% Coal 56% Gas 9% Source: Research Total Installed Capacity = GW With respect to electricity generation, coal is having the peak share with more than 56 percent of electricity production depends upon coal. FY 07 FY 08 FY 09 FY 10 FY 11 Power (Utilities) Steel Cement Others Source: Research Power sector consumes 65 percent of the coal in comparison to other sectors on account of huge thermal power capacity in India. Copyright 2013, All rights reserved

3 Research Case Coal Demand Supply Outlook in India 3 Indian Industries are heavily dependent on Coal Imports which increases their risk quotient. Indonesia has been the top coal importing coal source. But with the recent changes in Indonesian Coal Pricing Policy which deliberates complete ban on coal exports, many industries especially the Indian Power sector was puzzled. This made many of the plants unviable. Other Coalexporting nations are coming up with similar policies. The over exploitation of the local reserves and increasing concerns over the climate change makes a clear cut indication that coal imports might not be a reliable source Exhibit 3: Projected Domestic Coal Demand Supply Curve (in MTs) Supply Demand Supply Uncertainty Projected Actual FY08 FY11 FY14 FY17 FY20 Source: Research For a sustained economic growth, enhancing domestic production is the only option. So a strategic re-look towards the domestic coal sourcing is very much required in the current scenario. According to a presidential decree it has been mandated that Coal India Ltd. (CIL) should fulfil 80 percent needs of the power sector. But this pseudo-monopoly has denied firm commitments since FY10, and has supplied just 50 percent of contracted quantities. At the same time captive coal blocks have also managed a meager 14 percent development rate. This could be a crisis-in-the-making for coal-starved industries such as fertilizer, cement, iron and steel etc. which might face the axe of domestic supply diversion to more critical areas like defense, railways and power. 360 MT in this report analyses the entire supply side of coal by taking into account of both the volumes and prices till This report also identifies innovative coal sourcing options to various consumer segments, assess the inland and offshore coal infrastructure as well as logistics to cover up the extent of coal shortage. India is expected to have a Coal Demand Supply Gap of 360 MT by Copyright 2013, All rights reserved Copyright 2013, All rights reserved

4 Coal Demand Supply Outlook in India 4 s Difference Exhibit 4: s Difference Research reports delivering domain knowledge, market insights & future outlook Gist of the report in.pdf format for ready use Business Stakeholders/Pa rticipants Free Author support on report & Competitive cost Customized Research Solution Experts Insights/ Market view Validated data & analysis Research & Services Framework Research Desk Opportunity mapping & Market sizing Research Reports First hand sector knowledge & inputs Primary research inputs from F2F interviews S Research Difference Germinates from minds that think fresh to evolve path finding guide for all stake holders through quality information & analyses S Service Difference Emanates from seamless integration of domain expertise with first hand industry knowledge and customized research solutions at a very competitive cost Copyright 2013, All rights reserved

5 Research Objective Research Results Coal Demand Supply Outlook in India Research Objective & Results Coal Demand Supply Outlook in India 5 Coal Demand Supply Outlook in India 2013 for analyzing the demand supply outlook of the Indian Coal Sector and attempts to unveil the factual status and in depth analysis of the business potential in Indian Coal Sector. The report also include the detailed track of opportunities for various players across the value chain players. Exhibit 5: Research Objective & Results 1. Study the various coal supply options. 1. Projects overall coal supply till FY Study the Policy and Regulatory environment of the country. 3. Study and assess the coal transportation infrastructure 4. Analyze Innovative coal sourcing options. 2. Provides excellent insights about the policy and regulatory outlook for both domestic coal as well as coal imports 3. Inland and Offshore Infrastructure Gap Analysis till Formulation of Innovative Coal Sourcing Strategies 5. Impact assessment of Roadblocks to Coal Sector Development on Key Industries 6. Study the Domestic and Imported Coal Price. Copyright 2013, All rights reserved 5. Evaluates various non traditional coal supply options for coal consumers as competitive advantage over other consumers 6. Domestic and Imported Coal Price Forecast till The entire demand and supply side of coal by taking into account of both the volumes and prices till Copyright 2013, All rights reserved

6 Coal Demand Supply Outlook in India 6 Key Queries Resolved Exhibit 6: Key Queries Resolved Coal Outlook Series- Dishing out the conventional & unconventional ways for Investing in Indian Coal Sector What is the coal supply projections till 2020? Which are the various non traditional coal supply options for coal consumers as competitive advantage over other consumers? What would be the Domestic and Imported Coal Price Forecast till Data sets on Coal Blocks Development Status, Coal Imports, Inland and Seaborne Infrastructure Development Status, Players and Contracts What are the Innovative coal sourcing options.? What would be the price trends of Domestic and Imported Coal till 2020? Research agencies, FI institutions Power Project Developers, Steel and Cement producers, Coal mining companies, Engineering Firms Associated Industries Logistics and Infrastructure Companies Govt. & Regulatory Bodies Regulatory Framework Policies and Regulations Assessment of the present and future of inland and offshore coal infrastructure Estimation of Coal Supply Curve till 2020 What would be the Inland and Offshore Infrastructure Gap till 2020? What would be strategies for Innovative Coal Sourcing? What is the policy and regulatory outlook for both domestic coal as well as coal imports? What are the key risks and challenges faced by Coal sector in India? What would the production trends of domestic coal till 2020? What are the recent technologies used by key E&P companies? Copyright 2013, All rights reserved

7 Must Buy For Must Buy For Coal Demand Supply Outlook in India Must Buy For Coal Demand Supply Outlook in India 7 Exhibit 7: Must Buy For Power Project Developers Steel and Cement Producers Coal Mining Companies Government bodies Educational Institutions NGOs Policy Makers IT Service Providers Environment Bodies Consultants Logistics and Infrastructure companies Research firms Energy Trading Companies Research Bodies/Institutes Equipment Manufacturers Industry associations FII s/banks Engineering Firms Research reports delivering domain knowledge, market insights & future outlook Copyright 2013, All rights reserved Copyright 2013, All rights reserved

8 Contents & Coverage Coal Demand Supply Outlook in India 8 Executive Summary 1. An Overview 1.1 National Energy Mix of India 1.2 Share of Coal on Key Industries Sector 1.3 Coal Types & Associated Characteristics 1.4 Highlights of Indian Coal Sector 2. Indian Coal Industry Structure & Policies 2.1 Nationalization of Coal Mines 2.2 Structure of Indian Coal Industry o CIL and its Subsidiaries o Private Players o Company Wise 2.3 Coal Sector Policy & Regulatory Framework o Mining & Production - Regulations o Pricing & Distribution - Regulations o Imports & Exports Regulations o FDI Investments - Regulations 3. Indian Coal Industry- Trend Analysis 3.1 Reserves Estimated & Proven 3.2 Reserves Extractable 3.3 Demand & Supply Gap 3.4 Production & Consumption 3.5 Imports & Trading 3.6 Long Term and Short Term Prices 3.6 Washing & Blending 3.7 Coal Transportation 4. Coal Crisis A Comprehensive Analysis 4.1 Escalating Coal Demand 4.2 Chronic Shortfalls 4.3 Contract Dishonor by CIL 4.4 Hurdles in Captive Coal Block Development 4.5 Influence of Global Coal Market 4.6 E-Auction Beginning of Domestic Coal Market Mechanisms 4.7 Impact of Coal Crisis on Key Industries o Power o Iron & Steel o Cement and Other Industries 5. Coal Sourcing - CIL subsidiaries, SCCL and Govt. owned Coal blocks 5.1 Coal Supply o Supply - Ownership Wise o Supply - Block Wise o Supply - Region Wise o Supply - Grade Wise 5.2 Supply Projections for 2017 & 2020 o Projections - Ownership Wise o Projections - Block Wise o Projections - Region Wise o Projections - Grade Wise 5.3 Pit Head Price Projections for 2017 & 2020 o FSA o E- Auctions 5.4 Policy and Regulatory Outlook Copyright 2013, All rights reserved

9 Contents & Coverage Coal Demand Supply Outlook in India 9 6. Coal Sourcing Captive Coal Blocks 6.1 Coal Supply o Supply - Ownership Wise o Supply - Block Wise o Supply - Region Wise o Supply - Grade Wise 6.2 Supply Projections for 2017 & 2020 o Projections - Ownership Wise o Projections - Block Wise o Projections - Region Wise o Projections - Grade Wise 6.3 Run-of-mine Price Projections for 2017 & 2020 o FSA o Spot Prices 6.4 Policy and Regulatory Outlook 7. Coal Sourcing Coal Imports 7.1 Coal Imports o Coal Imports Country Wise o Coal Imports Port Wise o Coal Imports Grade Wise o Supply - Grade Wise 7.2 Import Projections for 2017 & 2020 o Import Projections - Country Wise o Import Projections - Grade Wise o Projections - Region Wise o Projections - Grade Wise 7.3 FOB /CIF Price Projections for 2017 & 2020 o Long Term Agreements o Spot Prices 8. Coal Logistics and Infrastructure - Inland 8.1 Coal Carrying Capacity - Inland Logistics & Infrastructure o Roads o Railways o Captive Transport 8.2 Projections - Coal Carrying Capacity for 2017 & 2020 o Roads o Railways o Captive Transport 8.3 Investment Required - Estimates 9. Coal Logistics and Infrastructure Offshore 9.1 Coal Carrying Capacity Offshore Logistics & Infrastructure o Port Wise o Bulk Carrier Wise 9.2 Projections - Coal Carrying Capacity for 2017 & 2020 o Port Wise o Bulk Carrier Wise 9.3 Investment Required Estimates 10. Coal Outlook for India 2017& Coal Industry Supply Mix 10.2 Coal Industry Supply curve Copyright 2013, All rights reserved

10 Contents & Coverage Coal Demand Supply Outlook in India Coal Industry Demand Supply Gap 11. Non Traditional Coal Supply Opportunity Analysis 11.1 CIL, SCCL and Govt. Owned o Effective Liaoning o Mandating Imports 11.2 Captive Blocks o Strategic Alliance o Joint Venture o MDO Entry o Excess Coal Diversion 11.3 Trading o Minority Stakes o Coal Trading Arm o E Auctions o Other Domestic Market Mechanisms 12. Way Forward 13. Conclusion 14. Annexure Copyright 2013, All rights reserved