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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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Tuesday, 29 December 20
CORROSION-RESISTANT STEELS FOR CARGO OIL TANKS - DNV GL
KNOWLEDGE TO ELEVATE
Crude oil is a complex mixture of substances at varying ratios and in most cases contains at least some salt water. ...
Tuesday, 29 December 20
CHINA COKING COAL FUTURES RISE FOR THIRD DAY ON SUPPLY WORRIES - REUTERS
Chinese coking coal futures extended gains into a third session on Monday, jumping as much as 6.2% as lower imports, sliding inventories and mines ...
Wednesday, 23 December 20
COKING COAL'S DECLINE LIKELY TO FOLLOW THE PATH OF THERMAL COAL’S PROGRESSIVE DEMISE - IEEFA
Technology disruption the likely theme of global energy markets in 2021
There has been a growing tsunami of climate commitment annou ...
Wednesday, 23 December 20
MARKET INSIGHT - INTERMODAL
As we all know, China forges more steel than the rest of the world combined, and even during this unprecedented pandemic, the nation is set to brea ...
Tuesday, 22 December 20
2021 DRY BULK OUTLOOK - SUPPLY GROWTH - TORVALD KLAVENESS
In the first article in the series we mentioned that dry bulk freight was in a super cycle between 2001 and 2008. The growth in global yard capacit ...
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- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
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