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