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Thursday, 30 January 14
JPU SETTLEMENT PRICE AS A BENCHMARK WILL DECLINE IN IMPORTANCE BUT REMAIN RELEVANT, SAYS WOOD MACKENZIE
 JPU price will remain above spot, trending closer to spot till 2015 then increasing to 2035.
Japanese Power Utilities (JPU) are approaching a crucial negotiation period with Australian coal producers in March, when large volumes are contracted annually. Wood Mackenzie says market players can expect JPU prices to remain above market prices for the foreseeable future. As for price trends, JPUs will have to pay high premiums till 2015, before dipping from 2016 to 2020. Post-2020 to the longer term, premium over spot prices will trend upwards again. This is a result of a move away from JPU-type coal in key demand markets, which also acts to reduce the significance of JPU price as a benchmark, although not negating it altogether.
In the next few years the JPU premium over market price will remain high, settling below US$7 per tonne ($/t) by 2015. Mr Prakash Sharma, Asia Pacific Coal Market Analyst for Wood Mackenzie says, "Although global oversupply persists in the overall seaborne thermal coal market, for the highly specific JPU-type coal supply, the market will be progressively tight as other customers increase their consumption of this type of coal.”
In the medium term from 2016 to 2020, Wood Mackenzie forecasts a period where the JPU premium will decline to as low as US$3.80/t over market price as additional JPU-type supply is set to come online and producers seek to gain market share by competitively pricing their product. However, growth in demand for lower quality coal in key markets is impacting producers' product mix strategies; thus reducing the availability of JPU-type coal. This combined with a longer-term decline in JPU-type supply capacity is projected to support the premium over spot prices.
Mr Rory Simington, Coal Supply Research Analyst for Wood Mackenzie elaborates, "Fast growing demand markets of China, India and South Korea, to some degree are turning away from higher priced JPU-type low ash coal towards a more inexpensive higher ash product available on the spot market. Producers who have experienced low prices throughout 2013, and have had their margins squeezed, have reduced production costs by switching much of their incremental production towards this higher ash 5,500kcal/kg NAR market. This leaves the supply growth picture for JPU-type coal fairly flat."
Japanese power plants cannot absorb a higher ash product due to their ash disposal concerns and have only used relatively small amounts of low-ash sub-bituminous coal from Indonesia. Therefore JPUs will likely still demand predominantly JPU-type coal. However, Japan's role in the Asia Pacific coal market place will diminish as its proportion of the thermal market declines from 31% to only ten percent by 2035. Consequently, this reduces the significance of JPU price as a benchmark.
Mr Sharma says, "With the fairly flat supply growth outlook for JPU-type coal, a tighter market will result for Japanese procurement. JPUs are acutely aware of this development. Since Japan is completely reliant on coal imports, JPUs are willing to pay a premium over spot prices to lock-in the price for twelve months rather than risk supply availability by switching to index-linked pricing. This is crucial as we believe nuclear capacity in Japan will not return to pre-Fukushima levels. As such, other fuels including coal will need to play a larger role."
"Even if headlines suggest Japan is increasing imports from North America to reduce reliance on Australian producers, the negotiations are still of great importance to Japan as we do not foresee North American supply satisfying their requirements to the same extent Australian producers can." North America currently supplies two percent of Japan's thermal coal requirements. By 2025, Wood Mackenzie estimates North America will still only make up less than ten percent of Japan's thermal coal requirements.
For the longer term past 2020, Wood Mackenzie forecasts premia rising steadily again as the availability of JPU-type coal continues to decline. The margin between JPU settlement price and cost of JPU-type coal production will support the development of new projects. Therefore, JPUs will have to recognise the need to offer higher premiums in order to incentivise new supply. The steadily rising premium will reach US$5.50/t by 2027 and US$10/t in 2035 as higher cost coal projects are developed.
In summary, Mr Sharma says, "Japan recognises the need to secure supply and price stability. Therefore, JPUs favour contracts to the spot market, even at a premium. This will keep JPU pricing relevant albeit playing a diminishing role as a benchmark due to the growing market proportion of higher-ash coal in the region. In the longer term post-2020, this need will translate to JPUs having to pay higher premiums so as to incentivise Australian producers to maintain supply capacity. Hence, the JPU benchmark may lose the status of price-setter but will not likely become a price-taker even if it means that the premium will persist."
Wood Mackenzie's Editor’s notes:
JPU-type coal refers to the coal type imported by Japanese Power Utilities which is prime quality bituminous thermal coal (6322kcal/kg GAR) from Australia under term contracts.
Market prices refers to New FOB Newcastle Market Price @6000kcal/kg NAR. It is used interchangeably with the term 'spot price' in this news release.
About Wood Mackenzie
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com
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Thursday, 30 January 14
PANAMAX MARKET IS SOFTENING ON LESS ACTIVITY IN BOTH HEMISPHERES - FEARNRESEARCH
Handy
In the Atlantic rates have been slowly sliding but ows can still achieve decent money for TArv´s. USG positions still being fixed in re ...
Thursday, 30 January 14
TANKER PROFITABILITY IS THE 'MILLION-DOLLAR' QUESTION FOR SHIP OWNERS THIS YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The tanker market conditions are expected to remain challenging throughout the year for tanker owners, but even more pressing will be the issue of a ...
Tuesday, 28 January 14
GLOBAL COKING AND STEAM COAL PRODUCTION HAVE GROWN 2% TO 3% TO ABOUT 7.1 BILLION TONNES AS OF THE END OF 2013 - VDKI
COALspot.com (Press Release): Initial figures on the world hard coal market at the VDKi ((Association of Coal Importers - German) New Year’s R ...
Tuesday, 28 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS JUMP 13.75% WEEK ON WEEK
COALspot.com: In the week ended 27 January 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
Tuesday, 28 January 14
RESOURCE NATIONALISM OR PROTECTIONISM FOR THE MINING AND EXTRACTIVES INDUSTRY - JOHN WHITTAKER & MICHAEL SWANGARD
Resource nationalism or protectionism for the mining and extractives industry as well as soft commodities sector and the oil industry.
‘Res ...
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Showing 3876 to 3880 news of total 6871 |
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- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- White Energy Company Limited
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- The University of Queensland
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Australian Coal Association
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
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