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