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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, 22 December 20
INDIA'S COAL DEMAND IS SET TO EXPAND DESPITE PLUMMETING IN 2020 - IEA
Coal consumption in India amounted to 979 Mt in 2019, with the largest share being thermal coal (including lignite) for electricity generation (687 ...
Tuesday, 22 December 20
SOUTHEAST ASIA'S COAL DEMAND IS SET TO EXPAND AFTER THE PANDEMIC-INDUCED HIATUS IN 2020 - IEA
Coal consumption in Southeast Asia has more than doubled in the last decade, with the largest growth in Indonesia and Viet Nam, followed by Malaysi ...
Tuesday, 22 December 20
COAL DEMAND IS RISING QUICKLY IN PAKISTAN AND MORE SLOWLY IN BANGLADESH - IEA
Pakistan had 150 MW of installed coal power capacity in 2015. Since 2017, in addition to a few small plants for industry, Pakistan has commissioned ...
Tuesday, 22 December 20
AFRICA PERSPECTIVE INDICATES NO MAJOR SHIFTS FOR COAL CONSUMPTION - IEA
Overall countries on the African continent consumed 197 Mt of coal in 2019, 12 Mt less (-6%) than 2018.
South Africa, the continent& ...
Monday, 21 December 20
COAL PRICES WITHSTAND DESPITE COVID-19 AND CHINESE IMPORT QUOTAS - IEA
Coal prices vary by region as well as by grade and quality. The price rebound starting in 2016 ended in 2018, moving in a downward trend in 2019. A ...
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- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
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