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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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Tuesday, 05 October 21
CAPESIZE MARKET WAS IN A STEEP CLIMB FOR MOST OF THIS WEEK - BALTIC EXCHANGE
Capesize
The Capesize market was in a steep climb for most of this week as it reached a pinnacle of $74,786 Wednesday before stalling, regather ...
Wednesday, 29 September 21
THE WRITING IS ON THE WALL: AUSTRALIA’S COAL ERA IS OVER - YAHOO!FINANCE
As the fringe of Australian politics strives to pump up the coal industry, facts show that coal production has started its long run decline.
&n ...
Wednesday, 29 September 21
SURGING COAL PRICES SPLIT ASIAN BUYERS INTO RICH AND POOR - REUTERS
As seaborne coal in Asia trades at, or near, record highs, there are early signs of demand destruction, especially among price-sensitive buyers suc ...
Wednesday, 29 September 21
MARKET INSIGHT - INTERMODAL
Tanker Asset values have surprised to the upside, despite the downward pressure on the freight market. Tanker rates have been hovering close to the ...
Tuesday, 28 September 21
THE MAIDEN EDITION OF DIVE TECHNOLOGY SUMMIT 2021 CONCLUDES SUCCESSFULLY
Press Release: DIVE TECHNOLOGY SUMMIT 2021, a one-day conference on the recent technological advancements in the Industrial Diving industry conclud ...
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- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
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