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Thursday, 17 December 20
CHINA'S BAN IS LESS OF A THREAT TO AUSTRALIA'S COAL INDUSTRY THAN INTERNATIONAL CLIMATE AMBITION - IEEFA
 Australian coal exporters will survive this near-term political fight but there are longterm structural headwinds
The decision by China’s National Development and Reform Commission to formally and indefinitely block Australian coal imports is a key threat to Australia’s political and economic wellbeing. Australia can never expect to win a trade war with its biggest export partner, and it is sheer political and economic suicide to try to do so. But is it devastating for the Australian coal export industry? Not at all.
Far more strategically threatening in the long term for Australia and our coal industry is the pledge by China’s president Xi Jinping to reach net zero emissions by 2060, which was rapidly followed by net zero emissions by 2050 pledges from Japan’s prime minister Yoshihide Suga and South Korea’s president Moon Jae-in. This series of sudden and powerful pledges of increased climate ambition by world leaders is likely to be terminal for our coal exports if we look out a couple of decades.
Australia is caught in the geopolitical quandary of having China as our key trade partner and the United States as our key military ally. When US president Donald Trump started a trade war with China, it was never going to turn out well for Australia. And incoming president Joe Biden is unlikely to change tack too materially where China and trade and technology are concerned (whereas on climate, Biden’s arrival changes everything). But we in Australia are like a mouse caught in the middle of two sparring elephants.
In business, the best rule is that the customer is always right (even if they are not). Our coal exporters will however survive this near-term political fight, probably far better than our wine or lobster export industries, by comparison.
There are no coal ships destined for China being loaded in Australia now. For most industries, that would be devastating. For coal, not so much. In fact, a look at the share prices of Whitehaven Coal and New Hope Corporation would suggest quite the opposite. Since the September 2020 trough, and acknowledging the sharp price falls on Tuesday, Whitehaven shares have rallied 70% and New Hope are up almost 20%.
Why? Coal is coal, at least to a finance analyst like me, if not an engineer. Australia sells the vast majority of its coal to Japan, South Korea and Taiwan. And if China buys more Russian, South African and Indonesian coal to replace Australian coal, then we can, by and large, simply swap customers, maybe with a month’s disruption. Total demand doesn’t change, nor does supply – at least not in the near term. Sure, there are some boiler and blending constraints, but notwithstanding coal luddite claims that Australia’s coal is slightly less carbon polluting than someone else’s seaborne coal, the minute difference is irrelevant – all coal is almost 100% more carbon intensive than wind, solar, hydro, nuclear or energy efficiency. Or green ammonia, as Japan’s JERA is now thinking.
The coal industry is actually benefiting from a near-term relief rally. In September Australian coal exporters were losing money with every tonne of coal they exported. In December, the picture is very different. China’s key Shanxi province has just shut down coal production near term due to a spate of deadly accidents, just as winter heating demand has kicked in. Meanwhile the Chinese industrial economy is powering along. So the Chinese domestic thermal coal price has jumped 35% to 740/t yuan in the last three months. Seaborne thermal coal prices have rallied from a low of US$46/t to over US$70/t in the same timeframe. Even as total volume of Australian coal exports have dropped in the December quarter, the value has surged, and more importantly, the profitability much more so (notwithstanding the 10% rally in the Aus$/US$, lifted by the unprecedented rally in iron ore prices). Hence the Whitehaven Coal and New Hope increase in share price.
The coal export sector outlook seems profitable again – in the near term. But the 25% collapse in the Dalrymple Bay Coal Terminal share price since its initial public offering last week is a clearer perspective of the longterm structural headwinds Australia’s coal industry is facing. Far better for our Hunter Valley, La Trobe Valley and Bowen Basin communities that we as a nation acknowledge the science of climate change, prepare a national roadmap, ideally with a destination and time of arrival clearly acknowledged.
The investment, employment and export opportunities for Australia are enormous, and exciting. To steal a very good line from Ross Garnaut and Mike Cannon-Brookes – better we focus on building Australia as a renewable energy superpower.
This commentary first appeared in The Guardian.
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Saturday, 23 January 21
GOVT PLANNING TO OPEN UP COAL MARKETING TO STREAMLINE PROCESS - THE INDIAN EXPRESS
The government is considering opening up coal marketing, Coal Secretary Anil Kumar Jain said on Thursday. Currently, production by Coal India is al ...
Thursday, 21 January 21
LNG MARKET RIDING HIGH, BUT WILL THE GAINS CONTINUE? - DREWRY
The LNG market started 2021 on a high note with Asian spot prices crossing $30 per MMBtu while LNG shipping rates recorded a high $350k per day due ...
Thursday, 21 January 21
CHINA'S SPOT THERMAL COAL PRICES REFRESH RECORD HIGH - MYSTEEL
Despite the moderate rebound in temperatures across most regions of China after late December’s deep-freeze, thermal coal prices in the count ...
Wednesday, 20 January 21
CORONAVIRUS OUTBREAK IN HEBEI HAS LIMITED IMPACT ON CHINA'S STEEL INDUSTRY - FITCH RATINGS
The recent Covid-19 outbreak in the steel producing hub Hebei will not have material impact on China’s steel industry, Fitch Ratings says.
...
Wednesday, 20 January 21
MARKET INSIGHT - INTERMODAL
While 2020 is finally behind us, its negative impacts are still hovering over the shipping market. That being said, it is still too early to even s ...
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- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- White Energy Company Limited
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Latin American Coal - Colombia
- The University of Queensland
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
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