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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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Friday, 10 July 20
GLOBAL SHIPPING EARNINGS FORECAST CUT AS SUPPLY SET TO OUTSTRIP DEMAND - MOODY'S
EBITDA forecast worsens, keeping outlook negative. We now expect the aggregate EBITDA of rated shipping companies to fall by around 16%-18% in 2020 ...
Friday, 10 July 20
SLOW RECOVERY IN TANKER RATES TO WEIGH ON BUANA LINTAS LAUTAN - FITCH RATINGS
Fitch Ratings believes that international tanker rates are likely improve after their sharp fall since May 2020, albeit at a slow pace. The weaknes ...
Wednesday, 08 July 20
MARKET INSIGHT - INTERMODAL
During the previous month, the dry bulk market witnessed an impressive increase in the BDI index that has reached 1800 points from 500 with a clear ...
Tuesday, 07 July 20
COAL INDIA WORKERS STRIKE CUTS OUTPUT BY 56%: OFFICIAL - REUTERS
A strike at Coal India Ltd cut production by 56% in the three days ending July 4 as workers oppose opening up coal mining to the private sector, a ...
Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
Wind, solar, electric vehicles, stationary storage and transmission are all central to achieving the Paris Agreement decarbonisation goals.
&nb ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- The University of Queensland
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
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