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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, 29 July 20
2019 U.S. COAL PRODUCTION FALLS TO ITS LOWEST LEVEL SINCE 1978 - EIA
In 2019, U.S. coal production totaled 706 million short tons (MMst), a 7% decrease from the 756 MMst mined in 2018. Last year’s production wa ...
Wednesday, 29 July 20
MARKET INSIGHT - INTERMODAL
The dry bulk sector is beginning to recover from reduced SnP activity recorded in the first quarter of 2020. The table below illustrates that appro ...
Tuesday, 28 July 20
DEUTSCHE BANK TO END GLOBAL BUSINESS ACTIVITIES IN COAL MINING BY 2025 - REUTERS
Deutsche Bank, in a revamp of its policies for fossil fuels, said on Monday that it would end business activities worldwide related to coal mining ...
Monday, 27 July 20
IEEFA ENERGY FINANCE CONFERENCE 2020: COAL, LNG, PETROCHEMICAL SECTORS FACE POOR OUTLOOK AND UPHILL BATTLE FOR INVESTORS
Fossil fuel industries were becoming less financially attractive even before the global coronavirus pandemic
Three major fossil fuel ...
Friday, 24 July 20
IPA: THERMAL COAL IMPORTS AT MAJOR PORTS DECLINE 35 PC TO 17.71 MT IN APR TO JUNE - ECONOMIC TIMES
These ports had handled 27.13 MT of thermal coal and 14.95 MT of coking coal in the April-June period of the previous financial year
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- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
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