Australia Coal terminal facing export slump amid Australia-China trade bans
China coal ban showing no signs of letting up, South32 boss says
Weaker coal prices contributed to an 8 per cent dent in South32's revenue from $3.21 billion to $2.94 billion from July to December 2020. This drop was driven largely by lower realised prices for its metallurgical coal, which took a $US145 million hit due, in part, to China's trade spat with Australia and an ensuing ban of Australian coal imports in October. © AAP South32 chief executive Graham Kerr echoed comments from BHP boss Mike Henry earlier in the week that he did not expect the ban to end any time soon, though he was still bullish about metallurgical coal in the medium to long-term.
The owner of one of the nation's largest coal ports says the Chinese government's ban on Australian coal has triggered a realignment of global trade flows that is sending more of the commodity from local shores to Europe and elsewhere in Asia.
Dalrymple Bay Infrastructure chief executive Anthony Timbrell said coal volumes shipped from its Hay Point terminal in Queensland had dropped to 55 million tonnes in 2020, down from 67 million tonnes, as it reported a maiden net loss of $113 million.
Renewables boom prompts calls to start planning for Yallourn coal closure, community groups say
Analysts say the renewables boom is killing coal, prompting community groups to call on the Victorian government to start planning for Yallourn's shutdown now.The analysis by Green Energy Markets and the Institute for Energy Economics and Financial Analysis (IEEFA) predicted up to five of Australia's 16 coal plants could close by 2025 because of an expected 28 gigawatts of clean energy expected to be connected to the grid.
Australia's coal producers have been hit hard since COVID-19 restrictions slashed demand for the commodity and worsening diplomatic ties between Canberra and Beijing led to China unofficially black-listing Australian coal imports.
The federal government, which has described coal as being in a "state of flux", is forecasting the nation's exports of metallurgical coal - used in steel-making - will fall by around 8 million tonnes to 169 million tonnes this year due to lower demand, while thermal coal - used in power generation - will fall from 213 million tonnes to 199 million tonnes.
But Mr Timbrell said he was expecting to see an uplift in demand for metallurgical coal as more governments reopened their economies and launched steel-intensive stimulus programs in the aftermath of the COVID-19 downturn.
Chinese investment in Australia plunges
Chinese investment in Australia collapsed by more than 61 per cent in 2020 amid diplomatic tensions between the two countries.This followed a 47 per cent fall in 2019 and is the lowest number recorded over the past six years.
"Our traditional customers in Japan, Korea, Taiwan and India have still been shipping significant volumes," he said. "There is underlying demand strength in the steel industry."
As Beijing's bans on Australian coal continue this year, leaving dozens of loaded coal vessels stranded off the coast and unable to dock, Mr Timbrell said trade flows were readjusting.
"As a result of the apparent ban of Australia coal exports to China, which has caused a bit of a re-casting of coal flows globally, we've been seeing more coal going into Europe than what we would ordinarily expect," he said.
Dalrymple Bay, which services mainly metallurgical coal producers in Queensland's Bowen Basin, has take-or-pay contracts with customers under which the company gets paid even in the event that less coal is delivered than expected.
"In a strange way the disruption of the last 12 months has highlighted the resilient nature of the asset," Mr Timbrell said. "Our financial results haven't changed materially."
Dalrymple Bay's stock price has fallen about 20 per cent since it listed on the ASX in December at $2.57 a share. It was trading about $2.10 on Friday. Fund managers said the escalation of trade tensions with China and the worsening outlook for coal exports late last year may spooked investors. As the world's most carbon-intensive energy source, coal is also the focus of growing concerns from investors and governments over its contribution to global warming.
Biden's Commerce Secretary Praises Trump's China Tariffs as 'Effective' .
Gina Raimondo described China's behavior as "anti-competitive" and "coercive," adding that the nation's "human rights abuses are horrific."Raimondo, the former governor of Rhode Island, was confirmed to her Cabinet role in the Biden administration by an 84 to 15 Senate vote on Tuesday. In an interview with MSNBC broadcast Thursday morning, Raimondo raised concerns about China and reiterated that the Biden administration plans to take a tough stance against the East Asian nation.