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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, 16 January 21
SEABORNE TRADE IN STEAM COAL DECREASED BY 11.6% FROM 937 MILLION TONNES IN 2019 TO 828 MILLION TONNES IN 2020 - COAL IMPORTERS ASSOCIATION, GERMANY
According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), global hard coal production dec ...
Friday, 15 January 21
OVER US$50 BILLION IN GAS POWER PROJECTS AND LNG IMPORT FACILITIES AT RISK OF CANCELLATION IN BANGLADESH, PAKISTAN AND VIETNAM - IEEFA
Pakistan and Bangladesh have already cancelled tenders for LNG imports
Emerging markets such as Vietnam, Pakistan and Bangladesh tha ...
Friday, 15 January 21
VIETNAM'S EXTRAORDINARY ROOFTOP SOLAR SUCCESS DEALS ANOTHER BLOW TO THE REMAINING COAL PIPELINE - IEEFA
9.3 gigawatts peak of solar capacity, equal to 6 coal power plants, installed in less than a year
Vietnam’s solar power indust ...
Friday, 15 January 21
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 14 January 21
KOREA MIDLAND POWER INVITED BIDS FOR AUSTRALIAN COAL FOR THREE YEARS SUPPLY
COALspot.com: Korea Midland Power Co. Ltd, issued an International tender for total 1,560,000 MT of Min.5,700 kcal/kg NCV coal of Australian Origin ...
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- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- VISA Power Limited - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- ASAPP Information Group - India
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
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