Outlook for Coal in Asia

Whitehaven Coal (ASX: WHC), Australia’s second largest listed pure coal player, has a substantial market for its thermal coal in Asia, but China is well down the list of its customers.

Some 56% of Whitehaven’s thermal coal output goes to Japan, 17% to South Korea, 11% to Taiwan, followed by Malaysia and the Philippines.

Australian thermal coal producers are well down the cost curve — plus, they can produce the high-quality coals needed by new generation thermal electricity plants in Asia.

The longer-term picture for our exports into Asia does include an upside.

As Whitehaven pointed out in its most recent half-year presentation, higher energy, low impurity coals are strongly aligned to environmental reforms.

And, Asia is in need of electricity supply to support a growing urban population and increased standard of living.

Furthermore, Asian nations are commissioning new ‘high efficiency, low emissions’ (HELE) coal-fired power stations.

Japan has 15 coal-fired power stations under construction with a total generating capacity of 8,670 megawatts.

Moreover, many thermal coal plants in Asia are less than 15 years old and so have long lives remaining — and aren’t expected to be blown up like has happened in South Australia and Victoria. (One online news site carried a picture of the chimneys at the Hazelwood station being blown up this week under the headline, “Hope they’ve got enough solar panels!”.)

Thermal coal producer New Hope Group (ASX: NHC) has argued that Australian thermal coals are well suited to the latest generation of ‘supercritical’ and ‘ultra supercritical’ power stations in Asia.

Supercritical steam plant technology is today the option of choice for most new coal-fired power stations, offering greater efficiency and lower emissions than older ones, now known as sub-critical stations.

Positive article from *********.com.au

https://*********.com.au/thermal-coal-exports-under-threat-more-than-china-politics/