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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, 01 September 21
KOMIPO TO BUY 1.56 MILLION TONS OF 5600 NAR COAL OF AUSTRALIA OR SOUTH AFRICAN ORIGIN FOR 2022 - 2024
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Wednesday, 01 September 21
MARKET INSIGHT - INTERMODAL
As the summer season is coming to an end, the dry bulk market continues to rally. The confidence that the outstanding freight market performance ha ...
Monday, 30 August 21
68% OF U.S. COAL FLEET RETIREMENTS SINCE 2011 WERE PLANTS FUELED BY BITUMINOUS COAL - EIA
In 2011, the United States had 317.6 gigawatts (GW) of coal-fired electric generation capacity. About 88.7 GW of that capacity was retired in the d ...
Friday, 27 August 21
ALL YOU NEED TO KNOW ABOUT COAL'S MASSIVE RALLY AND NEAR-TERM OUTLOOK - CNBCTV18
Australia’s thermal coal at Newcastle Port, the benchmark for the vast Asian market, has surged over 100 percent this year to trade above $16 ...
Friday, 27 August 21
THE ECONOMICS OF INDONESIA’S DIESEL POWER PLANT TO GAS CONVERSION PLAN ARE PROBLEMATIC - IEEFA
Deploying new small-scale LNG is an uphill battle for PGN
Indonesian gas is currently in a precarious position, where the government needs to ...
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- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Australian Coal Association
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- MS Steel International - UAE
- SMG Consultants - Indonesia
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
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