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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, 27 January 21
MARKET INSIGHT - INTERMODAL
As we have entered the era off renewable energies, all industries globally give max effort to minimize their carbon footprint and consequently thei ...
Monday, 25 January 21
ULTRAMAX YET ANOTHER POSITIVE WEEK FOR THE SECTOR, WHICH SAW INCREASED DEMAND ACROSS ALL BASINS - BALTIC BRIEFING
Capesize
The Capesize market rocked and rolled these past few days. But by weeks end little had changed on the Capesize 5TC as it settled down ...
Monday, 25 January 21
NEW LAW IN CALIFORNIA, USA, AFFECTING SHIPOWNERS' LIABILITY FOR OIL POLLUTION - BIMCO
Members are advised that amendments to the so-called Lempert-Keene-Seastrand Oil Spill Prevention and Response Act of 1990 in the State of Californ ...
Monday, 25 January 21
COAL INDIA SAYS GEARED UP TO MEET SURGE IN FUEL DEMAND FROM POWER SECTOR - PTI
State-owned Coal India Ltd on Saturday said that it is well geared to meet any surge in demand for coal from the power sector.
The s ...
Sunday, 24 January 21
GOVT ASSURES COAL INDIA OF 'FULL SUPPORT', STRESSES ON LEARNING 'NEW THINGS' - PTI
Coal Minister Pralhad Joshi assured Coal India of full government support, even as he said the PSU needs to learn “new things” for impr ...
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- Simpson Spence & Young - Indonesia
- The University of Queensland
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Marubeni Corporation - India
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