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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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- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
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- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Minerals Council of Australia
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- Renaissance Capital - South Africa
- Sical Logistics Limited - India
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- Kartika Selabumi Mining - Indonesia
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- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Planning Commission, India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
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