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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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Sunday, 13 December 20
LONGSTANDING DOWNSIDE RISKS TO TRADE OUTLOOK - BALTIC EXCHANGE
The OECD has attempted to put a positive spin on the trade message emanating from its latest economic outlook, released last week.
The ...
Sunday, 13 December 20
INDONESIA COAL OUTPUT AT 514 MILLION TONNES THIS YEAR, 2021 TARGET UNCHANGED - REUTERS
Indonesia coal output in the period to Dec. 10 stood at 514.2 million tonnes, official data from the energy ministry’s website showed.
&n ...
Thursday, 10 December 20
MALAYSIA'S CIMB ANNOUNCES COAL FINANCING PHASE-OUT BY 2040 AS ASIA'S FOSSIL FUEL DIVESTMENT DRIVE ACCELERATES - IEEFA
The first emerging markets bank to announce a progressive coal exit policy
Malaysia’s CIMB Group Holdings (CIMB) has announced ...
Wednesday, 09 December 20
MARKET INSIGHT - INTERMODAL
Heading towards the end of a difficult year and with the entire planet under the shadow of the covid-19 virus, it is interesting to proceed with a ...
Tuesday, 08 December 20
MARKET ANALYSIS - ALLIED SHIPPING
It is now undisputed that oil consumption for 2020 will post a considerable drop, as demand for several petroleum products has plummeted since the ...
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- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- The University of Queensland
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
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