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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, 22 February 22
CHINA'S DAILY OUTPUT OF COAL REBOUNDS TO OVER 12 MLN TONNES - REUTERS
China’s coal output returned to more than 12 million tonnes per day as of Feb. 20, the country’s state planner said on Monday, a level ...
Thursday, 17 February 22
MAJOR INSTITUTIONS PROVIDED OVER $1.5 TRLN TO COAL SECTOR IN 2019-2021, SAYS NGO GROUP - REUTERS
Financial institutions channelled more than $1.5 trillion into the coal industry in loans and underwriting from January 2019 to November 2021, even ...
Thursday, 17 February 22
APAC THERMAL COAL PRICES TO EASE ON END OF INDONESIA EXPORT BAN - FITCH RATINGS
Fitch Ratings-Shanghai/Singapore-14 February 2022: APAC thermal coal prices are likely to come under pressure in the near term due to seasonally we ...
Tuesday, 15 February 22
IS ANOTHER COAL SHORTAGE CRISIS LOOMING OVER INDIA? - BUSINESS STANDARD
In December last year, the Federation of Indian Mineral Industries (FIMI) shot off a letter to the Prime Minister claiming that the coal crisis was ...
Tuesday, 15 February 22
THERMAL COAL'S RECORD PRICE RUN MAY END UP ITS OWN WORST ENEMY - REUTERS
The price of benchmark Australian thermal coal rose last week to trade near record highs, providing a short-term boost to producers but increasing ...
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- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Australian Coal Association
- Star Paper Mills Limited - India
- White Energy Company Limited
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
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