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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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Thursday, 06 August 20
SUPRAMAX MARKET CONTINUED SIDEWAYS TREND, AND LITTLE INSPIRING NEWS APPEAR - FEARNLEYS
Capesize
There is presently a small correction in rates, but overall levels are up from previous week mainly due to increased demand in the Eas ...
Thursday, 06 August 20
KOREA SOUTH-EAST POWER INVITING BIDS FOR MIN 3,600-MAX 3,800 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) inviting bids for 80,000 Tons (MT) Min 3,600~Max 3,800 kcal/kg NCV coal f ...
Wednesday, 05 August 20
NO NEW MINING LICENSES - A REMINDER TO GOVERNORS IN INDONESIA - SSEK
Indonesia’s acting Director General of Mining and Coal (“DGMC”) has issued a letter to the country’s provincial Governors t ...
Wednesday, 05 August 20
AUGUST 2020 HBA HITTING ITS LOWEST LEVELS IN HISTORY
COALspot.com: The Indonesia Coal Price Reference for the month of August plunged 30.73% YoY, hitting its lowest levels in history and highlighting ...
Wednesday, 05 August 20
SLUMP IN OIL REVENUE CHALLENGES MIDDLE EAST OIL EXPORTERS - INTERMODAL
The Covid-19 pandemic has had far-reaching consequences on the global capital markets. Despite the US government’s efforts for a quick and de ...
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- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Planning Commission, India
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Australian Coal Association
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
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