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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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Wednesday, 25 November 20
CHINA KICKS AN OWN GOAL WITH AUSTRALIAN COAL - FORBES
China’s annoyance at Australia’s hardline stance on political interference and demands for an independent inquiry into the root cause o ...
Wednesday, 25 November 20
MINISTER - INDONESIA JAN-OCT COAL OUTPUT AT 459 MILLION TONNES - REUTERS
Indonesia coal output in the January to October period was 459 million tonnes, the country’s energy minister told parliament on Monday.
& ...
Wednesday, 25 November 20
INDIA: MORE STEPS NEEDED TO MAKE COMMERCIAL COAL MINING ATTRACTIVE TO GLOBAL PLAYERS - LIVEMINT
India concluded its first commercial coal mine auctions earlier this month. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odish ...
Wednesday, 25 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.38 PCT - XINHUA
China Taiyuan coal transaction price index stood at 129.21 points Monday, up 0.38 percent week on week.
The index, released by China ...
Wednesday, 25 November 20
MARKET INSIGHT - INTERMODAL
Over 90% of the world’s goods are transported by sea. LPG is a clean, energy efficient and portable fuel that is being marketed at an afforda ...
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- White Energy Company Limited
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- Global Business Power Corporation, Philippines
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- Ministry of Transport, Egypt
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- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
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- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
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- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
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- Antam Resourcindo - Indonesia
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- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Australian Coal Association
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
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- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Planning Commission, India
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Petron Corporation, Philippines
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- Tamil Nadu electricity Board
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