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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, 08 December 20
PANAMAX: THE OVERALL MARKET SEEMS TO BE UNDER NEGATIVE PRESSURE - ALLIED
Capesize
A rather indifferent week for the Capesize market, with BCI 5TC figure finishing the week with slight losses of 0.8%. The Atlantic enj ...
Friday, 04 December 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 04 December 20
THE INDONESIA COAL PRICE REFERENCE REACHES THREE MONTH HIGH ON IMPROVING DEMAND OUTLOOK
COALspot.com: The Indonesia Coal Price Reference reaches three month high on improving demand outlook . The Indonesia Coal Price Reference rose by& ...
Wednesday, 02 December 20
GLOBAL MINING SECTOR OUTLOOK STABLE DUE TO CHINA'S RECOVERY - FITCH RATINGS
China’s post-pandemic economic recovery and sizeable infrastructure-focused government stimulus boosted global metals and mining prices, help ...
Wednesday, 02 December 20
INDONESIA CONSIDERING CLOSING 3,400MW SURALAYA COAL PLANT - THE JAKARTA POST
The government is considering to shut down the aging Suralaya coal-fired power plant (PLTU) in Cilegon, Banten, and replace it with green energy, a ...
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- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Minerals Council of Australia
- Interocean Group of Companies - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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