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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$, lifted by the unprecedented rally in iron ore prices). Hence the Whitehaven Coal and New Hope increase in share price.
The coal export sector outlook seems profitable again – in the near term. But the 25% collapse in the Dalrymple Bay Coal Terminal share price since its initial public offering last week is a clearer perspective of the longterm structural headwinds Australia’s coal industry is facing. Far better for our Hunter Valley, La Trobe Valley and Bowen Basin communities that we as a nation acknowledge the science of climate change, prepare a national roadmap, ideally with a destination and time of arrival clearly acknowledged.
The investment, employment and export opportunities for Australia are enormous, and exciting. To steal a very good line from Ross Garnaut and Mike Cannon-Brookes – better we focus on building Australia as a renewable energy superpower.
This commentary first appeared in The Guardian.
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Wednesday, 07 October 20
MARKET INSIGHT - INTERMODAL
The challenges brought forward in 2020 proved to be very different from what we could have ever imagined. Together with placing a significant strai ...
Tuesday, 06 October 20
KOSPO TO IMPORT 80,000 MT OF 3,800 NCV COAL FOR 2H NOV
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 MT Min.3800 kcal/kg NCV coal 2H November, 2020 l ...
Friday, 02 October 20
THE INDONESIA COAL PRICE REFERENCE RISE AFTER HISTORIC CRASH TO US$ 49.42
COALspot.com: The Indonesia Coal Price Reference for the month of October Rise to US$ 51.00 after historic crash to US$ 49.42 in September 2020.
...
Friday, 02 October 20
SRI LANKA MUST LEARN LESSONS FROM AROUND ASIA TO AVOID FURTHER ELECTRICITY CRISES - IEEFA
Overcommitment to fossil-fuelled power generation is leading to excess capacity and rising capacity payments, subsidies, and tariffs around the con ...
Wednesday, 30 September 20
MARKET INSIGHT - INTERMODAL
Spot rates for Capesize bulk carriers received a significant boost last week, however, there are certain reservations in the market regarding the p ...
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- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Ministry of Mines - Canada
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- The University of Queensland
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
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