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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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Saturday, 23 January 21
GOVT PLANNING TO OPEN UP COAL MARKETING TO STREAMLINE PROCESS - THE INDIAN EXPRESS
The government is considering opening up coal marketing, Coal Secretary Anil Kumar Jain said on Thursday. Currently, production by Coal India is al ...
Thursday, 21 January 21
LNG MARKET RIDING HIGH, BUT WILL THE GAINS CONTINUE? - DREWRY
The LNG market started 2021 on a high note with Asian spot prices crossing $30 per MMBtu while LNG shipping rates recorded a high $350k per day due ...
Thursday, 21 January 21
CHINA'S SPOT THERMAL COAL PRICES REFRESH RECORD HIGH - MYSTEEL
Despite the moderate rebound in temperatures across most regions of China after late December’s deep-freeze, thermal coal prices in the count ...
Wednesday, 20 January 21
CORONAVIRUS OUTBREAK IN HEBEI HAS LIMITED IMPACT ON CHINA'S STEEL INDUSTRY - FITCH RATINGS
The recent Covid-19 outbreak in the steel producing hub Hebei will not have material impact on China’s steel industry, Fitch Ratings says.
...
Wednesday, 20 January 21
MARKET INSIGHT - INTERMODAL
While 2020 is finally behind us, its negative impacts are still hovering over the shipping market. That being said, it is still too early to even s ...
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- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Planning Commission, India
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- The University of Queensland
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
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