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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, 24 November 21
WHY THIS MINING ANALYST IS UPBEAT ON THE IRON ORE PRICE FORECAST - MOTLEY FOOL
In many ways, 2021 can be called the year of the iron ore price. Much of the talk of the ASX town this year has revolved around this key economic m ...
Wednesday, 24 November 21
PRICE OF CHINA’S COAL FUTURE DROPS BY 60% AS NATIONWIDE DAILY OUTPUT REACHES OVER 12 MILLION TONS: NDRC - GLOBAL TIMES
China’s daily coal output has now stabilized after reaching over 12 million tons and the price of coal futures has declined to 800 yuan ($125 ...
Friday, 19 November 21
CHINA: COAL SUPPLIES TO STABILIZE FOR COMING COLD SEASON
China is capable of ensuring stable coal supplies this winter and next spring with the increase in coal production and the rising stockpiles at pow ...
Wednesday, 17 November 21
MARKET INSIGHT - INTERMODAL
It has been another declining week for the dry bulk market and evidently, we are seeing asset values gradually losing momentum as well. Following a ...
Tuesday, 16 November 21
EARNINGS RECOVERY IN INDONESIAN COAL TO CONTINUE THROUGH 2021, BUT SLOW IN 2022 - FITCH RATINGS
The recovery in the operating and financial performance of Indonesian coal miners and coal contractors is likely to slow in 2022, but coal prices s ...
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- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Trasteel International SA, Italy
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- The University of Queensland
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
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