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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, 04 November 21
FASTER DECARBONISATION: BACK TO BASICS FOR THE MINING INDUSTRY? - WOOD MACKENZIE
To the uninitiated, rugby is a technical and complicated game. As young schoolboys it was all a wee bit confusing and we invariably ended up on the ...
Wednesday, 03 November 21
CHINA TO LAUNCH NEW DATA MONITORING SYSTEM, TARGETING COAL MARKET SPECULATION, HOARDING - GLOBAL TIMES
China’s top economic planner announced on Sunday a new data system for supervising the implementation of medium- and long-term contracts of c ...
Wednesday, 03 November 21
CHINA’S STATE PLANNER SAYS COAL SUPPLY IMPROVING, PRICES STABILISING - REUTERS
China’s coal supply situation has seen significant improvement with joint efforts from coal producers, logistics and downstream users, while ...
Wednesday, 03 November 21
HIGHER COKING COAL PRICES TO PARE PROFITABILITY OF STEELMAKERS IN SECOND HALF OF FY22 - CRISIL RATINGS
The operating margin of primary steelmakers will reduce by a third to 24-26% in the second half of this fiscal versus the first half as input cost ...
Wednesday, 03 November 21
MARKET INSIGHT - INTERMODAL
November is here and soon the all time seasonal favorite “all I want or Christmas is you” by Mariah Carey will be played in radio stati ...
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- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Parliament of New Zealand
- Malabar Cements Ltd - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
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