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