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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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Wednesday, 16 December 20
INDONESIAN COAL RECOVERING - FITCH
Commenting on Indonesian coal, Fitch Ratings, the Indonesian 4,200 kcal index has begun to recover, improving to over USD 29 in November compared t ...
Tuesday, 15 December 20
NEWCASTLE PRICES RECOVER - FITCH
Prices for the benchmark Newcastle 6,000 kcal/kg grade coal have rebounded to over USD 70/tonne since late November as major Asian economies ease l ...
Tuesday, 15 December 20
APAC COAL PRICES REBOUND ON IMPROVED DEMAND AND SUPPLY CUTS - FITCH RATINGS
Prices for the benchmark Newcastle 6,000kcal/kg grade coal have rebounded to over USD70/tonne since late November as major Asian economies ease loc ...
Tuesday, 15 December 20
CHINA EXTENDS FULL OPEN GESTURE TO IMPORTED COAL EXCEPT FOR AUSTRALIA - GLOBAL TIMES
Domestic, overseas suppliers will take up share with easier clearance
China's top economic planner on Saturday gave approval to ...
Monday, 14 December 20
PHILIPPINE BANK RCBC TO STOP LENDING FOR NEW COAL-FIRED POWER PROJECTS - MANILA BULLETIN
Yuchengco-led Rizal Commercial Banking Corporation (RCBC) has forthrightly declared that it will no longer extend financing to new coal-fired power ...
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- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Parliament of New Zealand
- Australian Coal Association
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
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