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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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- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
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