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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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Tuesday, 29 September 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.73 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.91 points Monday, up 0.73 percent week on week.
The index, released by China ...
Tuesday, 29 September 20
SHIPPING MARKET - ALLIED
Here we are, just a short breath before the final quarter of the year, and many are now debating to what extent we can really expect a firm dry bul ...
Tuesday, 29 September 20
INDONESIAN COAL COMPANIES' EARNINGS TO WEAKEN IN 2H20 - FITCH RATINGS
Rated Indonesian coal miners and contractors will have weaker operating and financial performances in the second half of 2020 than in the first, sa ...
Tuesday, 29 September 20
RUSSIA'S COAL PRODUCTION TO DROP BY 10.5% IN 2020, SAYS MINISTRY - TASS
Russia’s Economic Development Ministry projects a 10.5% decrease in coal production in the country in 2020 compared with last year to 395 mln ...
Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up fo ...
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- Posco Energy - South Korea
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- White Energy Company Limited
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Deloitte Consulting - India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
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