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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, 12 August 20
U.S. COAL PRODUCTION IN 2020 WILL DECREASE BY 29% FROM 2019 LEVELS TO 502 MMST - EIA
U.S. coal consumption, which dropped to its lowest point since April, totaled 95 MMst in the second quarter of 2020.
EIA expec ...
Tuesday, 11 August 20
BHP COAL ASSETS WORTH A BILLION LESS THAN JUST TWO YEARS AGO - IEEFA
Another global investor, the UK’s biggest public pension fund NEST, has withdrawn funds from BHP this week because the company is profiting & ...
Monday, 10 August 20
COAL IMPORT DROPS 43% IN JULY OWING TO HIGH STOCKPILE AT PITHEADS, PLANTS - PTI
“The market participants seem to have adopted a wait and watch approach and are currently looking for a direction. We do not expect to see an ...
Saturday, 08 August 20
GLOBAL COAL POWER PUZZLE - BALTIC EXCHANGE
Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
Friday, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest priva ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- The University of Queensland
- PTC India Limited - India
- Planning Commission, India
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
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