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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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Wednesday, 01 December 21
SUPPLY OF COAL TO POWER PLANTS IN NOV MORE THAN CONSUMPTION: JOSHI - PTI
The supply of coal to power plants in November is more than the consumption, resulting in rise in stock of dry fuel at power plants, and this trend ...
Wednesday, 01 December 21
MARKET INSIGHT - INTERMODAL
Essentially, anyone involved in the shipping and commodity markets still struggle with commodity supply issues and skyrocketing prices in the conte ...
Tuesday, 30 November 21
CHINA'S TOP ECONOMIC PLANNER SUMMONS COAL PRODUCERS; LONG-TERM PRICING MECHANISM IS ADVISED - GLOBAL TIMES
China’s top economic planner the National Development and Reform Commission (NDRC) said on Monday that they summoned coal producers for a hea ...
Tuesday, 30 November 21
CHINA'S COAL PRICES PLUNGE AFTER GOVT SIGNALS MORE PRICE REGULATION - REUTERS
China’s thermal coal futures dropped 5.6% on Monday after the state economic planner signaled further regulations for prices of the dirty pow ...
Friday, 26 November 21
AS COAL MARKET STABILIZES, CHINA STEPS UP NATURAL GAS SUPPLY TO MEET WINTER DEMAND - GLOBAL TIMES
The daily supply of natural gas in China has exceeded 1 billion cubic meters (bcm) since November began, up 11 percent year-on-year, data from stat ...
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- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Bhatia International Limited - India
- CNBM International Corporation - China
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- The University of Queensland
- Sakthi Sugars Limited - India
- Planning Commission, India
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
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