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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, 13 January 21
CHINA THERMAL GENCO PROFITS FACE PRESSURE AMID POWER SHORTAGES - FITHCH WIRE
High coal and gas prices will put near-term pressure on margins for thermal power generators in China, says Fitch Ratings. However, the power short ...
Wednesday, 13 January 21
COAL TO BE BIGGEST CONTRIBUTOR TO INDIA'S $5 TRILLION ECONOMY: AMIT SHAH - BUSINESS STANDARD
The Centre on Monday awarded the letter of allocation to successful bidders of coal mines under the commercial auction held during October-November ...
Monday, 11 January 21
MUTED COAL RECOVERY IN 2021 - BALTIC EXCHANGE
Coal demand is expected to rebound in 2021
Medium-term outlook is less favourable although demand declines are expected to be subtle ...
Sunday, 10 January 21
KOREAN GENCOS INVITED BIDS FOR TOTAL 880,000 TONS OF COAL FOR MARCH 2021 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), on behalf of EWP, KOSPO, KOSEP and KOWEPO issued an international tender for total 880 ...
Friday, 08 January 21
INDIA COULD COMPETE AGAINST CHINA IN SOLAR MODULE PRODUCTION WITH THE RIGHT GOVERNMENT SUPPORT - IEEFA
The focus should be on helping manufacturers become globally competitive
Although one of the top 10 solar module producers in the world, India ...
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- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- White Energy Company Limited
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
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