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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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Monday, 21 December 20
COAL'S PARTIAL RECOVERY IS SET TO FADE AFTER 2021 - IEA
Global coal consumption is estimated to have fallen by 7%, or over 500 million tonnes, between 2018 in 2020. A decline of this size over a two-year ...
Monday, 21 December 20
A REBOUND IN GLOBAL COAL DEMAND IN 2021 IS SET TO BE SHORT-LIVED, BUT NO IMMEDIATE DECLINE IN SIGHT - IEA
After a major drop in recent years, global coal demand is forecast to rise by 2.6% in 2021 before flattening out to 2025
A global ec ...
Friday, 18 December 20
AUSTRALIA PM WARNS OF ‘LOSE-LOSE’ IN ANY CHINA COAL SHIFT - REUTERS
Australian Prime Minister Scott Morrison said any shift by China away from importing high quality Australian coal would be a “lose-lose&rdquo ...
Friday, 18 December 20
BIG OIL AND COAL EXPORTERS FACE RECKONING AS PARIS AGREEMENT TURNS FIVE - CNA
On Dec 12, more than 70 global leaders came together at the UN’s Climate Ambition Summit, marking the fifth anniversary of the Paris Agreemen ...
Friday, 18 December 20
SOUTH AFRICAN COAL EXPORTERS LARGELY DEPENDENT ON THE ASIAN MARKETS - BANCHERO COSTA
South Africa is the fourth largest exporter of coal in the world, after Australia, Indonesia and Russia. In calendar 2019 the country exported a to ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Economic Council, Georgia
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- PTC India Limited - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
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