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