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