January 01, 2025
Welcoming 2025

Market Commentary
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Happy New Year 2025! We are thrilled to welcome the start of 2025, and here we are today on the first trading day of the year.  

We aim to begin this year with a positive yet realistic perspective, highlighting what we believe will perform well amidst the current global conditions.  

Although coal prices have recently declined quite steeply, they remain at a very favorable level. The current ICE Newcastle coal price is still significantly higher than the pre-Ukraine-Russia war era.  
 
ICE Newcastle Coal Price Chart
 
According to Mint, imports of thermal coal, used for power generation, in India increased by approximately 9% during the April-November period of fiscal year 2024. This rise was driven by higher purchases from import-based coal power plants (ICB), which have been required to operate at full capacity since March 2024 due to surging electricity demand.  

Data from the Central Electricity Authority (CEA) shows that import-based coal power plants imported 33.4 million tons during the period, up 29% compared to 26 million tons in the same period last year.  
 
India's Thermal Coal Imports by Countries (5M24)

India has 15 import-based coal power plants with a cumulative capacity of approximately 17 gigawatts (GW). Under normal conditions, many of these plants remain idle if the supply from domestic coal-based power plants (DCB) is sufficient to meet India’s national needs. However, the high cost of imported coal has also affected their operational schedules.  

India’s peak electricity demand reached a record 250 GW on May 30, 2024. This upward trend is expected to continue, particularly during the winter season when heating needs increase. According to the 20th Electric Power Survey, peak demand is projected to reach 277.2 GW by 2026-2027 and 366.4 GW by 2031-2032.  
 
India's Thermal Energy Landscape

Based on this research, we remain bullish on coal-related companies. This outlook also aligns with one of Pak Prabowo’s programs on energy security. Therefore, we maintain an overweight stance on the coal sector, particularly for companies focused on exports.

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