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