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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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Friday, 20 November 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 ...
Thursday, 19 November 20
MARKET INSIGHT - INTERMODAL
As we are moving towards the end of the year, the overall deal landscape of the dry bulk sector corresponding to the second half of 2020 (up to dat ...
Tuesday, 17 November 20
COAL SQUEEZE INTENSIFIES - BALTIC EXCHANGE
The message from the top is clear: cut out coal. While the regulatory pressure has been evident for some time, the race to banish the black stuff s ...
Tuesday, 17 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.35 PCT - XINHUA
China Taiyuan coal transaction price index stood at 128.72 points Monday, up 0.35 percent week on week.
The index, released by China ...
Tuesday, 17 November 20
AUSTRALIAN COAL EXPORTS TO CHINA SLUMP, BUT PRICES ARE MIXED - REUTERS
China’s unofficial ban on coal imports from Australia is starting to take its toll on volumes, with departing cargoes down sharply so far in ...
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- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
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