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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, 15 October 21
GLOBAL STEEL DEMAND GROWTH DOWNGRADED FOR 2021 DUE TO CHINA - WORLD STEEL ASSOCIATION
The World Steel Association (worldsteel) today released an update of its Short Range Outlook (SRO) for 2021 and 2022. worldsteel forecasts that ste ...
Thursday, 14 October 21
EIA FORECASTS U.S. COAL PRODUCTION TOTALS 588 MMST IN 2021, UP 53 MMST YOY
U.S. coal production in EIA's forecasts totals 588 million short tons (MMst) in 2021, 53 MMst more than in 2020.
According ...
Wednesday, 13 October 21
COAL PRICES ARE ROARING BACK AMID A GLOBAL ENERGY CRUNCH - SYDNEY MORNING HERALD
Soaring coal prices have placed Australia’s mining and energy exports on track to reach a record $349 billion this year evenas the value of t ...
Wednesday, 13 October 21
CHINA ISN'T THE ONLY HUGE ASIAN ECONOMY WITH A COAL SHORTAGE NOW - CNBC
China is not the only Asian giant grappling with an energy crunch — India is also teetering on the edge of a power crisis.
Mos ...
Wednesday, 13 October 21
MARKET INSIGHT - INTERMODAL
Following up on our insight on May 2021, where we discussed about the Capesize market outlook for the second half of the year, we are pleased to se ...
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- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Australian Coal Association
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
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