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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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Monday, 21 December 20
COAL'S PARTIAL RECOVERY IS SET TO FADE AFTER 2021 - IEA
Global coal consumption is estimated to have fallen by 7%, or over 500 million tonnes, between 2018 in 2020. A decline of this size over a two-year ...
Monday, 21 December 20
A REBOUND IN GLOBAL COAL DEMAND IN 2021 IS SET TO BE SHORT-LIVED, BUT NO IMMEDIATE DECLINE IN SIGHT - IEA
After a major drop in recent years, global coal demand is forecast to rise by 2.6% in 2021 before flattening out to 2025
A global ec ...
Friday, 18 December 20
AUSTRALIA PM WARNS OF ‘LOSE-LOSE’ IN ANY CHINA COAL SHIFT - REUTERS
Australian Prime Minister Scott Morrison said any shift by China away from importing high quality Australian coal would be a “lose-lose&rdquo ...
Friday, 18 December 20
BIG OIL AND COAL EXPORTERS FACE RECKONING AS PARIS AGREEMENT TURNS FIVE - CNA
On Dec 12, more than 70 global leaders came together at the UN’s Climate Ambition Summit, marking the fifth anniversary of the Paris Agreemen ...
Friday, 18 December 20
SOUTH AFRICAN COAL EXPORTERS LARGELY DEPENDENT ON THE ASIAN MARKETS - BANCHERO COSTA
South Africa is the fourth largest exporter of coal in the world, after Australia, Indonesia and Russia. In calendar 2019 the country exported a to ...
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- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
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- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
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- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- ASAPP Information Group - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
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