Did you note how similar recent priced movements are to roughly year 2003 ? And from a fundamental basis there are some trends that are highly conducive to really strong prices ? Now I'm not saying it will occur, but it's not a bad bet on oversized gains if you play it say underpriced Canadian nat gas stocks ( of course this has been true for a year plus ). What I heard is some companies actually switch from nat gas to oil for fuel because they can't get the stuff. And that China and elsewhere are taking measures to artificially drop usage now to try to avoid a possible massive shortage in the winter. Green initiatives may also mean some nat gas projects will be preferred to oil projects. Guess we'll see but Q1 the companies all had oversized profits and caught the market by surprise.
I'm holding a penny ASX listed Australian company which is a gas producer in Canada. It's had a share consolidation but my relative cost price is 24c and its currently trading at 22c, been over 12 months and still underwater. According to tradingview has a PE of 17. I'll continue to hold it because I think they are just ramping up production now. Calima Energy. I have a couple of other gas stocks, another penny which I've had 2 bites, 325% return + 111% return, that position is getting very large now, another gas stock had 3 bites averaging about 25% return over couple of months alltold.
Maybe need to change my opinion..... China Orders Top Energy Firms to Secure Supplies at All Cost By Alfred Cang 30 September 2021 Emergency meeting held this week on the energy-supply crisis Directive came from a vice premier to coal, power, oil chiefs https://www.afr.com/world/asia/chin...o-secure-supplies-at-all-cost-20211001-p58wbx China’s central government officials ordered the country’s top state-owned energy companies -- from coal to electricity and oil -- to secure supplies for this winter at all costs, according to people familiar with the matter. The order came directly from Vice Premier Han Zheng, who supervises the nation’s energy sector and industrial production, and was delivered during an emergency meeting earlier this week with officials from Beijing’s state-owned assets regulator and economic planning agency, the people said, asking not to be named discussing a private matter. Blackouts won’t be tolerated, the people said. Oil futures erased earlier losses in New York. West Texas Intermediate crude climbed as much as 1.4% to $75.84 a barrel on Nymex. Natural gas futures in New York extended gains, and shares of U.S. gas exporter Cheniere Energy Inc. rose. Chinese coal futures earlier surged to a record as the country grapples with shortages of the fuel ahead of a week-long holiday. Prices have more than doubled this year amid soaring electricity demand from factories and slow output growth from mines. The emergency meeting underscores the critical situation in China. A severe energy crisis has gripped the country, and several regions have had to curtail power to the industrial sector, while some residential areas have even faced sudden blackouts. China’s power crunch is unleashing turmoil in the global commodities markets, fueling rallies in everything from fertilizer to silicon. Calls to the state council went unanswered outside business hours. Volatility in the energy markets is poised to intensify on the order from the central government, said Bjarne Schieldrop, chief commodities analyst at SEB. China’s statement “to me implies that we are in no way on a verge of a cool-off. Rather it looks like it is going get even more crazy,” he said. “They will bid whatever it takes to win a bidding war for a cargo of coal” or liquefied natural gas. In a sign of how worried Chinese officials are, Premier Li Keqiang has vowed that every effort will be taken to maintain economic growth. China will ensure the needs of basic livelihoods are met and will keep industrial and supply chains stable, Li was cited as saying by China National radio during a meeting with foreign diplomats Thursday. China’s move “brings security of supply back on the forefront,” said Leslie Palti-Guzman, president of New York-based consultancy Gas Vista LLC. “This is bad news for European governments and consumers who will deal with elevated gas and electricity prices for the rest of the winter” as they compete with China for supply. — With assistance by Isis Almeida, and Jack Wittels
Estimated NGx21 likely price distribution for Oct., based on storage, cot positions, CPI, with quantile regression: Estimated Median level at $5.5~
OPINION China braces for a chilly winter as its home-grown energy crisis intensifies Stephen Bartholomeusz Senior business columnist September 30, 2021 the issues confronting the UK, Europe and China– the interaction of responses to climate change with a shortage of oil and gas supply relative to the rebound in demand as the world bounces back from the worst impacts of the pandemic (and the consequent surge in LNG and oil prices) – the core elements of China’s difficulties are homegrown. Nearly 60 per cent of China’s power is generated by coal, with about 90 per cent of that coal sourced domestically. It was coal that powered China’s remarkable acceleration in economic growth over the past half century, which helped turn it into the world’s manufacturing base and which fuelled the decades-long construction and property booms at the heart of its domestic economy. The seeds for the current crisis were largely sown within the five-year national strategic plan that ran from 2016 to 2020. Within that plan was the ambition of capping China’s energy requirements and carbon emissions and reducing the energy intensity of its economy. Those goals were imposed at the same time as China was trying to reduce pollution, lift the productivity of its industrial base and reduce a horrific rate of deaths and injuries in its coal mines by forcing the closures of smaller and low-quality domestic coal producers. The more recent introduction of non-negotiable emissions-reduction targets to try to deliver Xi Jinping’s commitment to reducing energy intensity by three per cent this year, achieving peak carbon by 2030 and reaching carbon neutrality by 2060 has overlaid a shortage of coal supply and the rising cost and declining quality and volume of China’s domestic coal resources. To try to achieve those targets, mines were closed or ordered to reduce production and heavy energy users like steel mills and aluminum producers were also forced to cut their output (hence the collapse in the iron ore price and the highest global prices for aluminium in more than a decade). Local governments have struggled to comply with Beijing’s directions – many are said to have ignored them in pursuit of energy-intensive growth and the revenue and employment that generates – and are now resorting to power cuts and blackouts because of the shortage of coal. Two-thirds of China’s provinces are now rationing power.CREDIT:BLOOMBERG The pandemic, which saw demand for coal slump, and the global antipathy to new production haven’t helped China’s power supply challenges. Nor has China’s effective ban on Australian coal. While Australia only supplied about two per cent, or about 50 million tonnes a year, of China’s energy coal requirements the quality and cost of the coal – its higher calorific values and lower sulphur content – meant it was the benchmark for regional pricing. When China imposed the ban in the second half of 2020 – in the midst of the worst of the pandemic – the price of Australian thermal coal slumped to about $US55 a tonne. China, however, was forced to source the replacement supply from South Africa, Indonesia, Russia and North America, driving the prices for inferior coal imports up dramatically. After the initial shock the Australian producers quickly diverted their output to new markets, some of them impacted by China’s diversion of traditional coal trades, and the price rebounded even as the global economy and its demand for coal recovered. The price of Australian thermal coal is currently at record levels above $US200 a tonne while China has been paying significantly more than that for imports of lower-quality tonnes. Its domestic coal prices have almost doubled from a year ago and are up about 40 per cent over the past six weeks. Confronted with the surge in prices its power generators have cut back on their purchases and left China with only about two weeks’ worth of reserves. The caps on the prices they can charge mean that many, if not most, would operate at a loss if they keep operating at full capacity. Beijing’s response has been to try to import more coal, at the vastly higher prices, and increase its imports of LNG. That is contributing to the global surge in the demand for gas and the resultant surge in its price at a time when Russia is focused on increasing its domestic reserves and US production has been affected by hurricanes and the impact of the pandemic on its onshore oil and gas production. Beijing will inevitably have to do whatever it takes, including sidelining its emissions targets until it gets the supply/demand equation into better balance and is able to maintain power through the looming winter to keep the lights and heating on. The central authorities are also mulling over a relaxation of the price caps for industrial users, allowing the generators to charge prices that reflect the increased cost of their inputs and providing an incentive for them to restore their own output. That would, of course, increase the demand for coal and be reflected in even higher coal prices but Beijing will inevitably have to do whatever it takes, including sidelining its emissions targets until it gets the supply/demand equation into better balance and is able to maintain power through the looming winter to keep the lights and heating on. An energy crisis, a potential property-driven financial crisis, continuing massive disruptions to the supply chains that connect China’s manufacturing base to the rest of the world and the continuing tensions with the US and its allies are occurring even as Xi is attempting a radical shift in China’s economic model. What’s that Chinese curse? Xi and the rest of China’s authorities are living through very interesting times.
India snags cheap Australian coal sitting at Chinese ports Bloomberg News | October 1, 2021 Markets Asia Australia Coal https://www.mining.com/web/india-snags-cheap-australian-coal-sitting-at-chinese-ports/ Coal bulker terminal at the port of Qinhuangdao. (Copyright Greenpeace | Liu Feiyue) India is buying Australian coal that’s been stranded inside China for months, according to people who have made the purchases, spotlighting how geopolitics is complicating Beijing’s battle against an energy supply crisis. The fuel is being bought at a $12 to $15 a ton discount to fresh shipments from Australia and is some of the cheapest thermal coal relative to its quality on the market, said the people, who asked not to be identified because they aren’t authorized to speak with the press. Indian cement makers and sponge iron plants are among buyers that are using the supplies to bridge domestic shortfalls. The development reflects the extent to which China-Australia relations have soured: China is battling a crippling energy crunch that’s set to get worse as winter sets in, and yet it won’t touch coal from Australia due to a geopolitical squabble. Indian firms have bought nearly 2 million tons of Australian thermal coal that has been sitting in warehouses at the Chinese ports, the people said. Stockpiles of the fuel at Indian coal-fired power plants, which produce nearly 70% of the country’s electricity, are near the lowest levels in four years and have prompted the state-owned miner Coal India Ltd. to direct more supplies to domestic utilities. That’s reduced shipments to other consumers, including aluminum makers, cement companies and steel mills. Prices for Australia’s Newcastle coal, considered an Asian benchmark, have surged close to a record. The discord between China, the world’s largest consumer and importer of coal, and Australia had stranded as many as 70 ships and 1,400 seafarers waiting to discharge their cargoes outside Chinese ports in January. Most vessels subsequently discharged their cargoes or diverted to other destinations. (By Rajesh Kumar Singh, with assistance from Dan Murtaugh)
Historical Natural Gas Chart. To test the high back in 2005, price would have to more than triple from here. This could be the beginning of a massive move.
Australia on the cusp of a zero-emissions iron ore deal with South Korea By Eryk Bagshaw and Mike Foley October 5, 2021 https://www.smh.com.au/world/asia/a...re-deal-with-south-korea-20211005-p58xfh.html Australia is on the brink of signing a clean energy agreement with South Korea that would allow for the use of hydrogen to make steel and transform the iron ore export industry. The deal would give the Morrison government a boost ahead of the Glasgow climate change talks in November where it is facing international scrutiny over its climate ambitions and refusal to commit to net-zero by 2050. Alan Finkel with Prime Minister Scott Morrison last year.Credit:Alex Ellinghausen Alan Finkel, who is leading the Australian government’s development of low emissions technologies, told South Korean and Australian business leaders on Tuesday the research would enable low-emissions technology to be implemented across the whole iron ore supply chain. “We are currently deep into discussions, which is led through my office with the Korean government, to finalise a bilateral partnership in low-emissions technologies,” the former chief scientist said at the Australia-Korea Business Council meeting. He said they included “getting the iron ore out of the ground, sending it by train to the coast, putting it on zero-emission ships to Korea, and making zero-emission steel using zero-emissions ingredients in Korea, including hydrogen.” Iron ore, Australia’s largest export, is worth more than $100 billion a year. But Australian Bureau of Statistics figures show the extraction, production and transport of minerals across the mining sector account for 15 per cent of the nation’s greenhouse gases. Hydrogen is seen as the key to providing the high levels of baseload power needed in industrial production and transport without using fossil fuels. Iron ore stockpiles at BHP in Western Australia Credit:Krystle Wright There are three methods to extract hydrogen. One is electrolysis that uses electricity to “split” water, which can be powered by renewables like solar power in an emissions-free process and is known as green hydrogen. Thermochemical reactions drive the other two methods. One uses gas and the other uses coal or gas, and for either to be a clean energy source they require carbon capture and storage to stop the emissions from the fossil fuels entering the atmosphere. These are known as blue hydrogen and are opposed by the Greens and environmental groups because they still require fossil fuels to produce the hydrogen. Fossil fuel is key for the production of steel out of iron ore. Finkel said to produce enough green hydrogen to replace them would require solar power to produce eight times the national level of annual electricity generation. The electrolysis process would also need to produce a further 1 million megawatts. Last year, only 200 megawatts were produced via electrolysis across the world. “So, the scale is just immense,” said Finkel. “But that’s a fantastic opportunity to seek opportunity for partners such as Korea to invest in Australia to help us to build this industry.” Finkel said there were three people per square kilometre in Australia, compared to 527 people per square kilometre in South Korea. “That land is an advantage for us to build on,” he said referring to solar power. “This is a difficult transition we’re going through. It’s not driven by the ordinary market dynamics where somebody comes up with a cheaper product and pushes out another one.” A tanker truck, operated by Linde AG, at a railway refuelling station in Salzgitter, Germany.Credit:Bloomberg The Coalition has preferred pursuing bilateral energy deals over international forums where it has been criticised for its climate change record. Prime Minister Scott Morrison spoke to new Japanese leader Fumio Kishida on Tuesday. A readout of the call said the pair were “keen to strengthen the economic partnership, including on secure supply chains and clean energy technology such as hydrogen”. Energy Minister Angus Taylor said in the lead up to Glasgow the collective focus must be on driving down the costs of new and emerging technologies to parity with existing alternatives. “No country can do this alone,” he said. “That is why Australia is establishing partnerships with countries like Korea, Japan, Germany, the UK and Singapore on low emissions solutions.” The deal with South Korea could also help Australia land a competitive advantage against other iron ore exporting economies in South America and Africa which are set to ramp up their exports in the next decade in key markets including China. South Korea, along with Japan and all of Australia’s major trading partners, has committed to net-zero emissions by 2050 or 2060. South Korean ambassador Jeong-Sik Kam said climate change has become one of the “most serious and pressing challenges of our time”. “Countries around the world are scrambling to find the optimal position where they can better protect the environment, and at the same time, keep the economy growing,” he said. Thomas Rudgley, an economist at Oxford Economics, said an important impending structural change for the Australian economy is the transition to a lower carbon emission economy. “A sustained period of policy inaction has left Australia as a relative laggard among advanced economies in adopting lower net emissions targets,” he said.