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Win for Canadian miners

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    Win for Canadian miners

    Canada’s coal miners are ramping up to take advantage of Australia’s poor relationship with its biggest trading partner, as outgoing Glencore boss Ivan Glasenberg says China is getting the coal it needs from other sources during the trade and diplomatic spat between Beijing and Canberra.

    China’s informal bans on Australian coal cover both thermal and coking coal, but with energy coal prices rising as global economies rebound from the coronavirus crisis, its ban on coking coal has severely depressed the price of Australian-sourced material.

    Industry sources say Chinese domestic prices sat at more than $US217 a tonne for premium coking coal last week, double the benchmark price of Australian coal.




    That is probably unsustainable in the long term.

    There is little doubt Canadian metallurgical coal miners are the major beneficiaries of the trade war in the short term — and perhaps in the longer term if China looks to develop alternatives to Australia’s Bowen Basin.

    Canada’s Teck Resources, which produces about 26 million tonnes of high-grade coking coal from its mines in British Columbia, said late last month it was diverting spot cargoes to China to take advantage of short-term pricing.


    Teck is looking to restructure its 2021 sales to increase exports to take advantage of what it said could be a $US50 a tonne premium to benchmark Australian prices.

    ASX-listed Atrum Coal is one of several hopefuls developing coal projects across the provincial border from Teck’s operations, in Alberta.

    Atrum is still four to five years away from production at its Elan hard coking coal project, which sits next door to the Grassy Mountain project acquired by Gina Rinehart for about $900m in her takeover of Riversdale Mining in 2019.


    Atrum chief executive Andy Caruso said the trade war between China and Australia had certainly increased interest in the region.

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    Mr Caruso said he didn’t necessarily see China looking to open up Canadian coal mines and create a “Simandou moment” for Queensland miners, but said the situation had highlighted the need for a diversity of supply to many Chinese steelmakers, and could be a “a catalyst” for a broader push to develop alternatives to Bowen Basin coal.

    “Markets including China will be looking to secure strong, high-quality resources. The dynamic over time will shift.

    “They want to see diversity, and Canada certainly offers that strong alternative … now and in the medium to long term,” he said.

    “It is a trigger for Chinese and other buyers to rethink their longer-term supply sources.”

    Mr Glasenberg said Glencore’s trading arm was looking beyond Australia to fill Chinese orders as its Australian mines had been frozen out of deliveries, with no end in sight to the impasse.

    While reports indicate a small number of cargoes of Australian coal were unloaded at Chinese ports last week, sources have downplayed suggestions the move could be a sign of a thawing in relations between the two nations.

    As of last week about 78 vessels carrying Australian thermal and metallurgical coal were still stuck off the coast of China’s ports, collectively holding more than 8 million tonnes of product destined for Chinese customers.

    Four vessels unloaded Australian metallurgical coal last week at Chinese ports.

    However, it is understood three of these were South Korean, and the decision to allow them to berth came after the South *Korean government approached Chinese authorities asking that the ships be allowed to dock and depart to allow for relief of crews stuck aboard for lengthy periods.

    Speaking to reporters on Friday, Mr Glasenberg did not indicate he saw any end in sight to China’s ban on Australian coal products, saying other countries were taking advantage of the *situation.

    “We’re not selling from Australia at the moment — as you well know, they’re not discharging Australian coal — but we are selling from other destinations,” Mr Glasenberg said.

    “A lot of coal is moving from Colombia, from South Africa, from Russia, from Indonesia.

    “China will still import about 185 million tonnes of thermal coal this year, which is similar to last year. I think they will maintain that target.

    “So what Australia is losing is coming from other sources of supply.”
    Last edited by malleefarmer; Dec 7, 2020, 04:13.

    #2
    New trade figures strongly suggest China’s bans on Australian coal have backfired economically, with coal import prices surging.

    Prices paid by China for imports of the two main types of coal — heating and steelmaking — have jumped by at least 40 per cent since low points earlier this year.

    Paradoxically, the informal bans — issued verbally — on Australian coal coincided with a string of drivers that were set to push coal prices higher in any event. Cutting out Australian supplies has turbocharged price rises.


    Some months before current trade tensions escalated, China introduced a plan to reduce the amount of coal it imports from all countries. However, new trade data for October shows steelmaking coal imports from Australia fell 21 per cent year on year, while imports from the rest of the world rose.

    Overall, China’s coal imports are down to a third of levels struck earlier this year, but imports from Australia are down to one-tenth of normal levels.

    The unwanted price rise in a key commodity for China just as the country enters the northern hemisphere winter should be a clear warning to Beijing that any wider plan to cut iron ore would also backfire economically: China has a higher dependence on Australian iron ore than it has on Australian coal.

    Coal prices have also moved higher inside China in recent days on the back of a mining catastrophe where 23 miners were reported killed in an accident at Chongqing earlier this month.

    Major industrial accidents push prices higher inside spot commodity markets. The iron ore price is still reflecting the Samarco dam disaster in Brazil five years ago.

    China’s coal comeuppance now puts Beijing policymakers in a tight bind: if China moves to lift coal imports from other suppliers (Indonesia, Canada, Mongolia), it will continue to pay higher prices as commodity markets generally participate in a COVID-19 recovery bounce.

    If China returns to the level of Australian imports it was managing earlier this year, the move will indicate either a softening of trade tensions or a pragmatic acceptance of Australia’s pivotal position in the coal market.

    “Current China policy towards Australian coal has a shelf life,” says Vivek Dhar, director of mining and commodities research at Commonwealth Bank. “At some stage over the next 12 months the economics will stand up.”

    Australian coal prices are separate to the prices paid in China for coal imports. Sidelined by the informal China bans, Australian steelmaking coal has fallen sharply in recent months, while heating coal is also down year on year though it has begun to recover in recent weeks.

    The surprise twist in both coal trade dynamics and the sudden lift in prices complicate efforts by the energy industry to move away from coal — higher global prices could ultimately mean that previously unattractive mining deposits are reassessed. In recent times, Rio Tinto has moved out of coal, while BHP has begun efforts to distance itself from the market.

    Glencore, one of the world’s biggest mining companies, has just announced it will move to net zero carbon emissions by 2050. Glencore is a major holder of Australian coal assets.

    The ASX’s biggest independent coal listing, Whitehaven Coal, gained 5 per cent to $1.68 on Monday. Whitehaven is up about 50 per cent this year.
    Last edited by malleefarmer; Dec 7, 2020, 04:16.

    Comment


      #3
      Australia’s agricultural exports have taken a $3.5bn hit this year amid escalating trade tensions with Beijing and the COVID-19 global border closures.

      While the nation’s farmgate production is forecast to rise by 7 per cent to $65bn in 2020-21 after *the nation’s second-largest winter crop and a promising rainfall outlook, the value of exports will drop overall by 7.2 per cent.

      The Australian Bureau of Agricultural and Resource Eco*no*mics has flagged a number of risks for the sector next year, including wine trade with China and labour shortages in the horticulture industry due to a smaller-than-usual foreign workforce because of travel restrictions.

      The ABARES commodities report for the December quarter says that while barley and wine have been the two exports most affected by trade tensions with China, the introduction of anti-dumping tariffs is expected to heap further pressure on the wine industry.

      “Disruptions to Australia’s trade with China continue, despit*e the economic benefits trade brings to both countries,” the report says.

      “To date exports of barley and wine have been most affected. Australian barley has been diver*t*ed to other markets, and exports of high-value wines to China spiked in anticipation of the anti-dumping security deposits introduced in late November 2020.”

      The value of Australia’s agricultural exports will drop from $48.2bn in 2019-20 to $44.7bn in 2020-21.

      The report warns that while Australia may be able to divert a limited amount of wine to existing markets, such as Britain and the US, a lack of access to China will likely reduce production value and sales in 2020-21.

      Australia had been China's largest supplier of imported wine, however, exports fell in the first half of this year, with volume falling by 23 per cent and value by 16 per cent compared with the same period last year.

      The ABARES report says the further easing of travel restrict*ions in Australia could boost wine tourism and help counteract Chin*a’s anti-dumping sanctions.

      “These activities were curtailed by COVID-19 restrictions and their revival will provide a welcome financial boost to these businesses,” it says, pointing to the fact that wine exports to Britain and the US are expected to remain high for the rest of 2020–21.

      ABARES executive director Steve Hatfield-Dodds said that despite the tensions with China, agricultural production was bouncing back from the drought.

      “Australian producers manage one of the most variable envir*onments in the world, so ebbs and flows in production are to be expected,” he said. “Exports have continued to find markets during the pandemic but the residual effect of past dry seasons and trade uncertainties are pushing down export value.”

      Fruit and vegetable prices are expected to rise, due to the impact of COVID-19 on the availability of labour for harvesting, with the price of summer veget*ables, stone fruit and table g****s expected to rise by 15- 25 per cent.

      ABARES says agricultural trade has been far less disrupted by efforts to contain the spread of COVID-19 than other goods.

      “This is consistent with experienc*e during the global financia*l crisis, because food demand is relatively unresponsive to changes in income,” it said.

      ABARES predicts that dom*es*tic demand for agricultural products will remain relatively strong, despite the anticipated contraction in economic activity in 2020–21. “This is because food is an essential good and because the pandemic has been well managed,” it says.

      “Increased people movement will help sustain a recovery in the domestic travel, accommodation and food services sectors, which will support demand for higher unit value agricultural products.”

      It says fewer cases of corona*virus was letting business precincts reopen, which will increase demand for dining at restaurants.

      Comment


        #4
        Theres no win for mining here mallee, our coal is already being shut down and converted to natural gas.

        Cause our country insists on letting a full on idiot be the PM.

        Canada has to be the only country sitting on trillions upon trillions of natural resources and we are still broke.

        I wish we had a Morrison here.

        Comment


          #5
          I think the standoff you have with China on barley sales is coming to a end soon. Bins getting empty really fast in western Canada and nothing burns barley faster than a couple of months of -25 weather when or if that happens. Can't count how many times China says they wont by my canola but guess what,they always do.

          Comment


            #6
            They are central planing long term market manipulators.
            They arn't so much mad at you they just take it as an opportunity they use to control commodity prices as much as possible.
            Right now they seem to be stockpiling as maybe we are coming to one of those few times no one is in control?
            My opinion only.

            Comment


              #7
              Originally posted by shtferbrains View Post
              They are central planing long term market manipulators.
              They arn't so much mad at you they just take it as an opportunity they use to control commodity prices as much as possible.
              Right now they seem to be stockpiling as maybe we are coming to one of those few times no one is in control?
              My opinion only.
              An excellent observation. They illustrate the difference between "schemes" and "planning".

              To ChIYna, a 10-year plan is short term, essentially immediate objectives.

              When an entity is working on a multi-generational scheme, they are prepared and positioned to manipulate every significant event into a tool to further their macro objective.

              They are masters of manipulation.

              Comment


                #8
                And our “master of manipulation” can hardly match his socks
                China must just shake their head when dealing with this nimrod

                Comment


                  #9
                  Originally posted by jazz View Post
                  Theres no win for mining here mallee, our coal is already being shut down and converted to natural gas.

                  Cause our country insists on letting a full on idiot be the PM.

                  Canada has to be the only country sitting on trillions upon trillions of natural resources and we are still broke.

                  I wish we had a Morrison here.
                  Bc still mines huge amounts of coal mostly exported, yes domestic coal burning being shut down. Part of the hypocrisy of BC wanting to shut down AB oil, yet mining coal.

                  New potential coal mine coming to the Crowsnest pass.

                  Comment


                    #10
                    Originally posted by GDR View Post
                    Bc still mines huge amounts of coal mostly exported, yes domestic coal burning being shut down. Part of the hypocrisy of BC wanting to shut down AB oil, yet mining coal.

                    New potential coal mine coming to the Crowsnest pass.
                    and no one calls them on it ?
                    kenney should be on that every day

                    Comment


                      #11
                      Originally posted by caseih View Post
                      and no one calls them on it ?
                      kenney should be on that every day
                      If anyone thinks climate change isnt a reason to target a certain demographics, jurisdictions and industries then you havent been paying attention.

                      Why target BC, the are already full of progressive whackos.

                      Its sask and Ab that need to be broken. Break that free will just like the maritimes and then under the govt wing forever. But if you cant break someones spirit, then break their livelihood is the next best thing. That usually does it.

                      Comment


                        #12
                        I think Australia will be placed in the trade sin bin by China into 2021. A Biden administration will want to keep the China phase one trade deal going as US is benefiting from it. China will make an example of Australia as a warning to other countries.

                        Comment


                          #13
                          well at least you have a man at the wheel , who says what need to be said
                          we got the same treatment for our guy being an idiot and dancing

                          Comment


                            #14
                            Originally posted by malleefarmer View Post
                            I think Australia will be placed in the trade sin bin by China into 2021. A Biden administration will want to keep the China phase one trade deal going as US is benefiting from it. China will make an example of Australia as a warning to other countries.
                            More to it than meets the eye:

                            Comment


                              #15
                              Originally posted by jazz View Post
                              Theres no win for mining here mallee, our coal is already being shut down and converted to natural gas.

                              Cause our country insists on letting a full on idiot be the PM.

                              Canada has to be the only country sitting on trillions upon trillions of natural resources and we are still broke.

                              I wish we had a Morrison here.
                              You especially will like his extreme covid lockdown policies! LOL Australians don't piss around and have been much more aggressive with enforcement.

                              Comment

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