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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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Monday, 24 August 20
A COMBINATION OF DEVELOPMENTS DROVE THE FALLOFF COAL PRICES - CHIEF ECONOMIST’ OFFICE, AUSTRALIA
China, rising domestic production combined with subdued power demand;
India, a lockdown coupled with government directives that fav ...
Monday, 24 August 20
AUSTRALIA'S THERMAL COAL EXPORTS ARE FORECAST TO DROP FROM AN ESTIMATED $20 BILLION IN 2019-20 TO $16 BILLION IN 2020-21: REPORT
Thermal coal spot prices have fallen sharply as the impact of COVID-19 drives a contraction in seaborne trade for only the second time this century ...
Saturday, 22 August 20
REPORT SEES INDIA’S RELIANCE ON THERMAL POWER DROPPING TO 50% IN 2021, 43% IN 2026 - ET ENERGY | IEEFA
India’s dependence on thermal power will reduce to 50 per cent by 2021-22 and 43 per cent by 2026-27 on the back of renewable energy (RE) cap ...
Friday, 21 August 20
323 MILLION ELECTRIC VEHICLES WILL BE ON THE ROADS BY 2040 - WOOD MACKENZIE
Electric vehicle (EV) sales are expected to reach 45 million units per year by 2040, with a total global EV stock of 323 million, according to new ...
Friday, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
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- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- The University of Queensland
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
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