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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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Friday, 29 January 21
COAL EXPORTS FROM AUSTRALIA TO MAINLAND CHINA DECLINED BY -22.2% Y-O-Y IN 2020 - BANCHERO COSTA
In the 12 months of 2020, global seaborne coal trade declined by as much as -12.7% year-on-year, according to vessel tracking data from Refinitiv, ...
Friday, 29 January 21
OPEC+, COVID-19 AND ENERGY TRANSITION - 3 THEMES IMPACTING OIL MARKETS AND REFINING IN 2021 - WOOD MACKENZIE
Wood Mackenzie’s latest outlook report shows that the art of balancing oil markets and the refining sector in 2021 hinges upon three key them ...
Thursday, 28 January 21
STRONG CHINESE THERMAL COAL IMPORTS TO BENEFIT INDONESIAN MINERS IN THE NEAR TERM - FITCH RATINGS
China's thermal coal imports are likely to remain strong ahead of the Chinese New Year in mid-February on robust demand, high utilisation at do ...
Thursday, 28 January 21
WIND PROPULSION FOR DRY BULK CARRIERS - OLDENDORFF
Oldendorff Carriers (OC) has signed a Joint Development Project (JDP) with Anemoi Marine Technologies (Anemoi), Lloyd’s Register (LR) and Sha ...
Thursday, 28 January 21
BUMA PRICED A USD400 MILLION 7.75% 5-YEAR SENIOR NOTES
PT Delta Dunia Makmur Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama priced a USD400 million 5-year (non-callable 2-year)& ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
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