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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, 25 November 20
CHINA KICKS AN OWN GOAL WITH AUSTRALIAN COAL - FORBES
China’s annoyance at Australia’s hardline stance on political interference and demands for an independent inquiry into the root cause o ...
Wednesday, 25 November 20
MINISTER - INDONESIA JAN-OCT COAL OUTPUT AT 459 MILLION TONNES - REUTERS
Indonesia coal output in the January to October period was 459 million tonnes, the country’s energy minister told parliament on Monday.
& ...
Wednesday, 25 November 20
INDIA: MORE STEPS NEEDED TO MAKE COMMERCIAL COAL MINING ATTRACTIVE TO GLOBAL PLAYERS - LIVEMINT
India concluded its first commercial coal mine auctions earlier this month. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odish ...
Wednesday, 25 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.38 PCT - XINHUA
China Taiyuan coal transaction price index stood at 129.21 points Monday, up 0.38 percent week on week.
The index, released by China ...
Wednesday, 25 November 20
MARKET INSIGHT - INTERMODAL
Over 90% of the world’s goods are transported by sea. LPG is a clean, energy efficient and portable fuel that is being marketed at an afforda ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
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