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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, 14 October 20
MARKET INSIGHT - INTERMODAL
The tanker market has experienced severe freight rate and asset value declines over the past 5 months. A potential market upturn may arise in the c ...
Friday, 09 October 20
INDIA'S COAL IMPORTS IMPROVE SOMEWHAT, BUT RECOVERY IS UNEVEN - REUTERS
India’s coal imports, depressed by the impact of coronavirus this year, regained ground in September, but in an uneven uptick – shipmen ...
Thursday, 08 October 20
CHINA'S COAL IMPORTS FROM INDONESIA DECLINED 16.4% Y-O-Y, TO 80.2 MLN TONNES IN THE FIRST 9 MONTHS OF 2020 - BANCHERO COSTA
China's coal imports boomed in 2019, surprising many who had expected the government would clamp down strictly on shipments.
...
Thursday, 08 October 20
GLIMMER OF LIGHT FOR COAL, BUT SHORT TERM - FNARENA
Is coal on the rebound? Demand appears stronger and supply reductions have underpinned a tightening market. Certainly, the Newcastle thermal coal p ...
Wednesday, 07 October 20
U.S. COAL PRODUCTION TO DECREASE BY 26 PERCENT IN 2020 COMPARED TO 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 525 million short tons (MMst), compared with 705 MMst in 2019, a 26% decrease.
COVID-19 a ...
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- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- The University of Queensland
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Planning Commission, India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
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