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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, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
Wednesday, 15 July 20
CHINA'S JUNE COAL IMPORTS FALL 6.7% Y/Y ON PORT CURBS - REUTERS
China’s coal imports dropped 6.7% in June from the same period last year, as stringent import restrictions at ports impeded purchases by trad ...
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- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- The University of Queensland
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Planning Commission, India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
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