⛏️ GEOPOLITICS: MAIN COAL PRODUCING COUNTRIES ⛏️
Before the pandemic, political discourse was based on a shift to renewable energy. The blockade and subsequent inflationary and geopolitical tensions erased any good intentions. Firstly, because many of the clean resources lack power; secondly, because many minerals and solar panels come from China; and lastly, because cheap and easy natural gas has run out thanks to the conflict with Russia. So, coal is the cheapest and traditionally used energy. According to the BP Statistical Review of World Energy 2023, the main countries are:
Rank | Country | million metric tons | % Relative | % Accumulated
1 China 4,020 44% 44%
2 India 1,090 12% 56%
3 Indonesia 665 7% 64%
4 Australia 480 5% 69%
5 Russia 440 5% 74%
6 United States 370 4% 78%
7 South Africa 280 3% 81%
8 Vietnam 260 3% 84%
9 Poland 190 2% 86%
10 Kazakhstan 180 2% 88%
11 Mongolia 160 2% 90%
12 Canada 150 2% 92%
13 Colombia 130 1% 93%
14 Germany 120 1% 94%
15 Ukraine 110 1% 96%
16 Czech Republic 100 1% 97%
17 Uzbekistan 90 1% 98%
18 South Korea 80 1% 99%
19 Japan 70 1% 99%
20 Turkey 60 1% 100%
± 18% might be controlled by a openly pro-USA bloc (Australia, USA, Poland, Canada, Germany, Czech Republic, South Korea, Japan and Turkey) and ± 82% by others. In contrast, BRICS and pro-China bloc might control ± 64% and ± 54% of total. However, non-aligned group could control the ± 11%. LATAM and Africa have a small contribution in this with ± 4%.
Based on a sample of 3 years with weekly data and ETFs, the large correlation of coal is with copper by ± 46%. It has a correlation by ± 36% with WTI, ± 37% with uranium, ± 26% with gold and ± 11% with natural gas. Finally, the correlation with SP500 is ± 16%.
The most relevant is pointed that only 5 countries (China, India, Indonesia, Australia and Russia) control the ± 70% of total. They do not have strong affinity with US. In fact, might be more linked to China than Western Alliances. In fact, from the top 10, only 2 are in the Western World: USA and Poland.
The best analysis is yours!
J. Joel Padilla
Copyright: Joel Padilla 2023
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