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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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Thursday, 07 January 21
FITCH FORECASTS DOUBLING IN ASIAN WIND, SOLAR CAPACITY BY 2029, TOPPING 1,500GW
Despite some near-term delays due to the Covid-19 pandemic, solar power and offshore wind will drive steep growth in non-hydro renewables in Asia, ...
Wednesday, 06 January 21
INDONESIA EXCEEDS COAL PRODUCTION TARGET IN 2020
Indonesian coal production reached 557.54 Million Tons in 2020 1.37% higher than of last year’s total target of 550.00 Million Tons, accordin ...
Wednesday, 06 January 21
CHINESE CITIES REPORTEDLY GO DARK AS COUNTRY FACES SHORTAGE OF COAL, A MAJOR AUSTRALIAN EXPORT - CNBC
Several major Chinese cities have reportedly gone dark as authorities limit power usage, citing a shortage of coal.
Analysts said pr ...
Tuesday, 05 January 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP - XINHUA
China Taiyuan coal transaction price index stood at 136 points Monday, up 0.91 percent week on week.
The index, released by China Ta ...
Tuesday, 05 January 21
THE INDONESIA COAL PRICE REFERENCE SOARS TO HIGHEST ONE-MONTH INCREASE SINCE DECEMBER 2016
COALspot.com: The Indonesia coal price reference for January 2021 settles above $75 for the first time since July 2019 and to highest one-month inc ...
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- White Energy Company Limited
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
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