• 2 minutes Rational analysis of CV19 from Harvard Medical School
  • 4 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 7 minutes Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 3 hours China wields coronavirus to nationalize American-owned carmaker
  • 14 mins Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 10 hours Open letter from Politico about US-russian relations
  • 1 day US will pay for companies to bring supply chains home from China: Kudlow - COVID-19 has highlighted the problem of relying too heavily on one country for production
  • 3 days Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 3 days China's impending economic meltdown
  • 3 hours Trump Hands Putin Major Geopolitical Victory
  • 3 hours COVID&life and Vicious Circle: "Working From Home Is Not Panacea For Virus"
  • 9 hours Oil Tanker Runs Aground in Mauritius - Oil Spill
  • 19 hours Trump is turning USA into a 3rd world dictatorship
  • 2 days Liquid Air Battery
  • 2 days What the heroin industry can teach us about solar power (BBC)
  • 3 days The Truth about Chinese and Indian Engineering
The Worst Oil Trades Ever Made

The Worst Oil Trades Ever Made

Wall Street is full of…

Another OPEC Producer Looks To Back The Aramco IPO

Another OPEC Producer Looks To Back The Aramco IPO

As the world’s largest initial…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Are These Signs of Coal's New World Order?

A few interesting data points from different parts of the world in coal this week. Which could be signalling a big change underway in global production patterns.

First stop: Indonesia. Where a number of indicators emerged suggesting that thermal coal production may not be sustainable.

First, there was word early in the week that the nation's largest producer will probably cut capital spending this year.

That's Bumi Resources. Whose management was quoted by local press as saying that project spending in 2014 "may be lower than last year."

That's potentially significant. Given that Bumi produced over 80 million tonnes of coal last year--accounting for approximately 20% of Indonesia's overall output.

At the same time, high-profile Indonesia miner PT Timah gave the local coal sector the thumbs down. Saying the industry appears uneconomic.

Timah--which currently operates tin mining concessions in Indonesia--had been looking at acquiring a coal mine in East Kalimantan. But this week it called off the deal. Saying that the target mine is unprofitable.

Both of these events suggest that Indonesian coal production is facing increasing headwinds. Even as output seems to be growing in another key coal-producing nation: Australia.

Reports this week show that coal loadings at Australia's Newcastle port have been robust of late. With shipments hitting 3.45 million tonnes for the week ended this past Monday.

That's a 39% jump in coal exports as compared to the previous week. And represents a 13-week high for coal loadings out of Newcastle.

Some 80 to 85% of these shipments are thermal coal (as opposed to metallurgical coal). Suggesting that demand for the product here is seeing a resurgence.

Here's the really interesting part. All of these observations make perfect sense in light of recent events in major coal consumer China. Where a reported ban on low-quality coal imports should see less Indonesian supply coming in. And more imports being sourced from alternate suppliers of better-quality coal--Australia being the closest at hand.

Could we be seeing the start of a "new world order" in coal, triggered by this rule change? The numbers are off to an interesting start.

Here's to shifting patterns,

By Dave Forest


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News