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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, 21 October 20
MARKET INSIGHT - INTERMODAL
The second wave of COVID-19 is now a reality; offices are closing again, and stricter rules and regulations are being implemented in public spaces. ...
Tuesday, 20 October 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.82 PCT - XINHUA
China Taiyuan coal transaction price index stood at 127.49 points Monday, up 0.82 percent week on week.
The index, released by China ...
Tuesday, 20 October 20
BIMCO 'SHIPLEASE' TERM SHEET - WATSON FARLEY & WILLIAMS
KNOWLEDGE TO ELEVATE
The ever-growing importance of sale and leaseback transactions as an alternative to financing ships by way of loan, makes ...
Friday, 16 October 20
KOMIPO ON BEHALF OF K GENCO'S INVITED BIDS FOR TOTAL 715,000 MT MIN. 5,700 NAR COAL FOR DECEMBER
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 715,000& ...
Wednesday, 14 October 20
CHINA COKING COAL FUTURES RALLY ON REPORTED BAN ON AUSTRALIA CARGOES - REUTERS
Dalian coking coal futures rallied for a sixth straight session on Tuesday after reports surfaced that China had stopped buying coal from Australia ...
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- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Petron Corporation, Philippines
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Parliament of New Zealand
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
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