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Tuesday, 23 August 22
HIGH COAL PRICES COULD BOOST INDONESIA'S ENERGY TRANSITION - IEEFA
 Global coal prices have reached an all-time high as countries stop purchasing Russian coal amidst the Russia-Ukraine conflict. Indonesian coal companies have become one of the biggest beneficiaries of this change, with eight companies reporting high realized coal prices, net profits and operating cash flows for 2021 and 1Q22.
These coal companies are not expanding coal capacity, with one or two exceptions, capital expenditure (capex) is mainly for maintenance and there are moves towards non-coal projects. The major exception is the dimethyl ether (DME) project announced by state-owned coal miner PTBA (Tambang Batubara Bukit Asam), but the projects face uncertain financial returns and funding as IEEFA reported in 2020.
In this report, IEEFA highlights that coal prices will likely stay elevated given conflict-induced changes to trade flows. Due to disruptions in shipping schedules, Korea and Japan are likely to buy less Russian coal and substitute with coal from Indonesia and Australia, hence coal prices are likely to stay high.
In the longer term, the new trade flows will likely require time to adjust even following conflict resolution. Therefore, coal prices will be supported during this adjustment process.
Moreover, even if China ends its unofficial ban on imports of Australian coal, it is unlikely to help ease supply pressure. This is because there are already existing buyers for Australian coal since the ban was implemented. Its higher prices could make it likely to be priced out of the Chinese market.
IEEFA’s deep dive into the Indonesian coal sector finds that the eight companies are not reinvesting into new coal capacity. However, two have plans to acquire a new mine (ABM Investama) or build up downstream capacity (PTBA), while taking the opportunity to repay debt.
While this is not surprising, considering the 185 global financial institutions which have clearly stated that they will no longer support coal or coal power plant financing, a lack of new coal supply may mean coal prices continue to stay elevated, putting the onus of energy transition on potential buyers.
In the event that there is conflict resolution, coupled with the EU’s commitment to decarbonize, coal prices are likely to normalize from current levels longer term. Coal companies should not miss the opportunity now to diversify away from coal before the cost to transition gets higher.
- Ghee Peh -
Ghee Peh
Ghee Peh is an energy finance analyst with a focus on the Asian coal industry and South East Asia. Ghee has worked on major mining IPOs in Hong Kong and Indonesia including coal, copper and gold companies and has a deep interest in commodity markets.
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Friday, 23 September 22
CHINA DIGS DEEP TO RAISE COAL OUTPUT TO RECORD HIGH - REUTERS
China’s coal production has surged this year as the government seeks to improve energy security by reducing dependence on imports and amassin ...
Friday, 23 September 22
EUROPEAN STEEL BUYERS SEEK DIRECTION IN VOLATILE MARKET - MEPS INTERNATIONAL
Demand for steel is slow to recover, after the summer break. Mill production costs continue to increase. Steel purchasers are uncertain about the f ...
Friday, 23 September 22
BUOYANT COAL INDUSTRY SEEKS WAYS TO STAY IN THE LONG-TERM ENERGY MIX - REUTERS
There’s no doubt that the global coal industry has been a major beneficiary of Russia’s invasion of Ukraine and the subsequent energy c ...
Friday, 23 September 22
MARKET INSIGHT - INTERMODAL
In view of the forthcoming winter, Europe is trying to escape from its energy (oil & gas) dependency from Russia to ensure energy abundance eve ...
Tuesday, 20 September 22
CHINA'S DAILY COAL OUTPUT HITS 3-MONTH LOW IN AUGUST ON RAINS, COVID CURBS - REUTERS
China’s daily coal output in August slipped to a three-month low as some mines in its biggest coal mining regions reduced operations or even ...
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- Wood Mackenzie - Singapore
- Parliament of New Zealand
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Planning Commission, India
- Bhatia International Limited - India
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
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