I’m afraid the world is just not ready for Chinese reopening. If it comes, and I’m less convinced of its imminence than markets, a new energy shock is bearing down on Australia before we’ve addressed the old one.
Since China tweaked its zero-COVID regime, global coal prices have flown:
LNG and coal futures have to converge in the future. What is at stake at this juncture is will coal fall or LNG rise?
Contrary to Minerals Council lies, coal does play a material role in setting east coast electricity prices. Electricity futures are thus climbing again:
Speaking of such lies, there are none more toxic than those put forth by former resource ministers turned industry whorebag:
Federal intervention in the energy market would be “catastrophic” and jeopardise crucial trade relationships with Japan and South Korea, Queensland Resources Council boss Ian Macfarlane says.
“People had the opportunity as little as a year ago to buy gas on long-term contracts for less than $10 (a-gigajoule) and they didn’t take it,” he said.
…Mr Macfarlane said the coal and gas industry was now gearing up for a campaign against any federal impost on the sector.
Pfft. Why is EIG offering $18bn for Origin if there’s so much sovereign risk?
As well, manufacturers have been entirely consistent in asking for intervention since 2014 because there is no gas “market” at all. That the Ukraine War shifted the price deck is irrelevant.
The Mineral Council is a source of propaganda only. To wit, the ACCC:
Large manufacturers are being offered gas contracts for 2023 at rates up to five times the levels being offered a year ago, with Labor warning that factories will shut down unless it makes an urgent market intervention to cut prices.
New data from the competition regulator shows one energy producer offered gas at an extreme price of $65 a gigajoule next year to industrial users while Australia’s big retailers have offered a dozen contracts between $30GJ and $40GJ, still more than triple the price from 12 months earlier.
Gas-reliant manufacturers say these price levels would send them out of business.
The Australian Competition & Consumer Commission, which handed advice on a range of intervention options to Jim Chalmers last Friday, disclosed the data to industry as part of its preliminary analysis before its gas market report is released in January 2023.
Time to smash the energy war profiteers.
