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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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Friday, 22 October 21
CHINA WANTS TO COOL COAL PRICES. SIMILAR MOVES FOR METALS, CRUDE FAILED - REUTERS
China’s latest attempt to lower runaway commodity prices, this time for thermal coal, is likely to follow a familiar pattern of initial succe ...
Friday, 22 October 21
HARD COAL REMAINS AN IMPORTANT FACTOR FOR SECURITY OF SUPPLY - COAL IMPORTERS ASSOCIATION, GERMANY
- Hard coal remains an important factor for security of supply
- Increase of around 35% in hard-coal-fired power generation in the first three ...
Wednesday, 20 October 21
CHINA'S COAL SHORTAGE TO EASE IN COMING MONTHS, INDUSTRY BODY SAYS - REUTERS
China’s coal shortage will likely ease in coming months, with domestic production and imports already showing signs of picking up, a coal ind ...
Wednesday, 20 October 21
CHINA'S RAW COAL OUTPUT DROPS IN SEPTEMBER - XINHUA
China’s raw coal output dropped 0.9 percent year on year to 330 million tonnes last month, data from the National Bureau of Statistics (NBS) ...
Wednesday, 20 October 21
OVER-RELIANCE ON COAL IN OUR POWER MIX HURTING INDIA - LIVEMINT
In spite of the renewables push, coal still accounts for about 50% of India’s installed power capacity. That means a simultaneous demand and ...
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- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- White Energy Company Limited
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- The University of Queensland
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
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