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Thursday, 14 October 21
SPIKING COAL PRICES: DON’T BLAME THE ENERGY TRANSITION - IEEFA
 Volatility highlights urgency for renewables-based energy solutions
“Energy crisis.” The phrase evokes nearly-forgotten images of gasoline queues in the 1970s, but increasingly describes the spike in global fossil fuel prices. A handful of commenters eagerly lay the blame on renewable energy, which they claim has distracted the world’s attention from investments in oil, gas, and coal production that could have calmed markets.
But a sober analysis suggests that today’s energy price crunch has nothing to do with renewables. After all, price spikes aren’t unique to energy. Computer chips, lumber, copper, and iron ore are among the many commodities and products that have seen global price spikes and shortages this year. As the COVID-19 pandemic raged and then eased—alternately slamming the brakes and flooring the accelerator of the global economy—volatility became the rule rather than the exception.
A close look at the surge in global coal prices is instructive. Prices for some low-grade thermal coals have quadrupled on international markets since last year’s lows. COVID-induced volatility bears much of the blame. But price spike also has its roots in the world’s largest coal market, China, which produces (and consumes) half the world’s coal and meets 60 percent of its energy needs from the mineral.
Over the past year, China has experienced domestic coal shortfalls and shrinking stockpiles that forced the country to boost its imports. Given the country’s outsized appetite for coal, even a modest boost in imports quickly sent seaborne coal prices skyrocketing. The recipe for China’s coal shortages had at least five key ingredients, none related to the country’s renewables policies:
A mine safety crackdown. The Chinese coal mining sector has been a risky business. The state-run Xinhua News Agency reported that 225 coal miners died in China during 2020 in 122 accidents. But in the wake of a cluster of fatalities, federal authorities launched a major safety inspection effort in November 2020. The heightened scrutiny was blamed for a slowdown in production that began in April, a month after China boosted penalties for mine accidents. The prospect of jail time made mining executives reluctant to boost output even as supplies tightened.
Curbs on overproduction. China’s coal mining sector had struggled over much of the past decade with overcapacity that flooded markets with cheap coal—making it hard for many firms to find profits. Last November, just as China’s government was cracking down on coal mine safety, it also stepped up inspections for quota violations—once again making it risky for mining companies to boost supplies.
An anti-corruption campaign in Inner Mongolia. One of China’s most sparsely populated provinces, Inner Mongolia produces roughly one-quarter of the nation’s coal. President Xi Jinping announced in March that the government would investigate coal industry corruption in the region in a campaign that would “never end.” (The campaign focused, in part, on companies producing more coal than their quotas.) Top officials in the regional government have been sent to jail for more than a decade, with one given a suspended death sentence. In early 2021, the government was investigating almost 700 corruption cases involving about 1,000 people. The campaign, which was expanded across the country, also encouraged coal mining firms to curb their production to avoid becoming entangled in an investigation.
A halt to Australian coal imports. Tensions between Australia and its largest trading partner heated up last year, largely due to China’s territorial claims in the Pacific Ocean and the Australian government’s call for a “weapons inspector”-type investigation of the origins of the COVID-19 virus. China responded by blocking Australian coal imports in November 2020. The squabble led Beijing to seek out other markets for coal imports from Indonesia, Russia, the United States and South Africa. The shift contributed to a tripling in the price of lower-grade Indonesia coal over the summer.
Weather: Too cold, too hot, and too wet. An unusually cold 2020-21 winter in North Asia prompted blackouts in some regions. At least nine grid systems in northern provinces recorded record demand in early January. Summer heat waves continued to pressure the coal supply. Now winter approaches, and major power plants reported having about a 10-day stockpile of coal, roughly half of last year’s total. The country, desperate to boost coal consumption, faces a new weather-related obstacle: Record-breaking floods have shut down 60 mines in Shanxi province, a region that produces 30 percent of China’s coal.
These factors, together with COVID, helped precipitate a domestic coal crunch in China that quickly spread around the planet. Those who would blame the growth of renewables for China’s coal shortages are grasping at straws. If anything, ramping up investments in renewables would ease the country’s reliance on volatile, unpredictable fossil fuel supplies.
As for China, so for the world. Until the planet completes its transition to a renewable energy-based economy, supply and demand shocks—such as the ones currently traveling around the globe—will be a fact of life.
By Clark Williams-Derry
Energy Policy Analyst
IEEFA
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Thursday, 26 August 21
INDIA IMPORTED 17.06 MLN TONNES OF LPG IN 2020; UP 11.5% Y-O-Y
Global LPG trade remained fairly positive in 2020, despite the global economic impact from COVID-19, and surged strongly in the first half of 2021. ...
Thursday, 26 August 21
MARKET INSIGHT - INTERMODAL
24th of August 2021, the Baltic Dry Index reached 4,201, a YTD high and the highest since May 2010.
Cape 5TC daily average @ 51,472
...
Tuesday, 24 August 21
COAL PRICE RALLY TO PRESSURE CHINESE POWER GENCOS’ MARGINS FITCH RATINGS
Fitch Ratings expects the pressure on Chinese power generation companies’ (gencos) profit from the recent coal price surge to weaken their cr ...
Tuesday, 24 August 21
TIGHT POWER SUPPLY IN CHINA AMID STRONG DEMAND, HIGH COAL PRICES - FITCH RATINGS
China experienced tight power supply in 1H21 on stronger than expected power demand as economic activity continued to recover, Fitch Ratings says i ...
Monday, 23 August 21
CHINESE COAL PRODUCTION RISES 4.9 PCT IN 1ST 7 MONTHS OF 2021 - NBS
Official figures demonstrated that the Chinese raw coal production surged 4.9 percent annually to 2.26 billion tonnes in the January-July period of ...
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- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- The University of Queensland
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Parliament of New Zealand
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
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