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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, 03 February 21
INDONESIA TO EXPORT 395 MILLION TONS OF COAL IN 2021 - ESDM
Data from the Ministry of Energy and Mineral Resources shows that, Indonesia is planning to produce 550 million Ton of coal in 2021 and as of t ...
Wednesday, 03 February 21
MARKET INSIGHT - INTERMODAL
"2020 the year from hell for the entire world, had everything for shipowners. The introduction of the sulphur cap and VLSFO, a Pandemic outbre ...
Tuesday, 02 February 21
WILL THE ELECTRONIC B/L BE FULLY IMPLEMENTED? FIVE POINTS TO CONSIDER - MOL
KNOWLEDGE TO ELEVATE
The trend towards digitization of Bills of Lading (B/L) has begun to attract attention in the trade and shipping industrie ...
Monday, 01 February 21
A 56,000-DWT OPEN MANILA WAS FIXED FOR A TRIP VIA INDONESIA REDELIVERY CHINA AT $11,500 - THE BALTIC BRIEFING
Capesize
The Capesize routes endured a week of slippage on rates, bringing the market back down to levels seen at the beginning of the month. D ...
Monday, 01 February 21
PAKISTAN: COAL DEMAND EXPECTED TO SPIKE IN 2021 - DAWN
Coal demand is expected to remain upbeat in 2021 as more coal-fired and captive power plants are coming up in the current year.
Acco ...
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- Economic Council, Georgia
- Australian Coal Association
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Planning Commission, India
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Georgia Ports Authority, United States
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