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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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Tuesday, 29 December 20
CORROSION-RESISTANT STEELS FOR CARGO OIL TANKS - DNV GL
KNOWLEDGE TO ELEVATE
Crude oil is a complex mixture of substances at varying ratios and in most cases contains at least some salt water. ...
Tuesday, 29 December 20
CHINA COKING COAL FUTURES RISE FOR THIRD DAY ON SUPPLY WORRIES - REUTERS
Chinese coking coal futures extended gains into a third session on Monday, jumping as much as 6.2% as lower imports, sliding inventories and mines ...
Wednesday, 23 December 20
COKING COAL'S DECLINE LIKELY TO FOLLOW THE PATH OF THERMAL COAL’S PROGRESSIVE DEMISE - IEEFA
Technology disruption the likely theme of global energy markets in 2021
There has been a growing tsunami of climate commitment annou ...
Wednesday, 23 December 20
MARKET INSIGHT - INTERMODAL
As we all know, China forges more steel than the rest of the world combined, and even during this unprecedented pandemic, the nation is set to brea ...
Tuesday, 22 December 20
2021 DRY BULK OUTLOOK - SUPPLY GROWTH - TORVALD KLAVENESS
In the first article in the series we mentioned that dry bulk freight was in a super cycle between 2001 and 2008. The growth in global yard capacit ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- CNBM International Corporation - China
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- India Bulls Power Limited - India
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