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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, 08 December 20
PANAMAX: THE OVERALL MARKET SEEMS TO BE UNDER NEGATIVE PRESSURE - ALLIED
Capesize
A rather indifferent week for the Capesize market, with BCI 5TC figure finishing the week with slight losses of 0.8%. The Atlantic enj ...
Friday, 04 December 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 04 December 20
THE INDONESIA COAL PRICE REFERENCE REACHES THREE MONTH HIGH ON IMPROVING DEMAND OUTLOOK
COALspot.com: The Indonesia Coal Price Reference reaches three month high on improving demand outlook . The Indonesia Coal Price Reference rose by& ...
Wednesday, 02 December 20
GLOBAL MINING SECTOR OUTLOOK STABLE DUE TO CHINA'S RECOVERY - FITCH RATINGS
China’s post-pandemic economic recovery and sizeable infrastructure-focused government stimulus boosted global metals and mining prices, help ...
Wednesday, 02 December 20
INDONESIA CONSIDERING CLOSING 3,400MW SURALAYA COAL PLANT - THE JAKARTA POST
The government is considering to shut down the aging Suralaya coal-fired power plant (PLTU) in Cilegon, Banten, and replace it with green energy, a ...
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- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Australian Coal Association
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
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