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Tuesday, 17 March 15
GAS TO CHALLENGE COAL IN THE ASIAN POWER GENERATION MIX - WOOD MACKENZIE
 KNOWLEDGE TO ELEVATE
Wood Mackenzie says that coal is facing increasing competition from gas in the power sector. Coal has dominated as the fuel of choice in Asia, even in the gas-centric power markets of SE Asia since 2010. In recent years, it has been assumed that coal will remain the most economical option for power generation. However, downward pressure on gas prices as well as individual market conditions in Asia are creating conditions in which it might compete with coal in the region.
Mr Graham Tyler, Research Director for Asia gas & power says, "While gas-coal competition is more commonplace in the US and Europe, in Asia, this is a new dynamic as coal and gas prices have not been at close enough levels for this to be a consideration. Spot LNG prices have fallen to around US$7 per million British thermal units (mmbtu) in recent months and we do not forecast any sustained price recovery above US$10/mmbtu with over a 100 million tonnes per annum (Mtpa) of new LNG expected to be operational by 2020. This looming supply glut will create an environment where coal versus gas competition in Asia is a real possibility." Asia's near-term gas demand growth is slowing, primarily due to a weaker economic growth and structural changes in the key market of China.
Turning to coal, Mr Prakash Sharma Research Director for Asia coal markets, says, "Benchmark thermal coal prices in the seaborne market are trading below the marginal cost of supply for many producers, and therefore are unlikely to fall significantly lower in the future. Coal prices are sitting at multi-year lows due to several factors including weakening demand and domestic protectionism in China: Delivered thermal coal prices have fallen from a peak of around US$110 per tonne (US$/t) in 2012 to below US$80/t in recent months already and historically, coal prices only fluctuated within a narrow band of US$2-4/mmbtu." Currently coal accounts for half of all power generation across Asia, while gas only accounts for 11%. However with coal prices not expected to fall more dramatically and gas prices expected to see renewed softening after this summer, Wood Mackenzie asserts that the price differential between gas and coal will be one to watch.
Mr Tyler says; "The price differential is key but there is not one single price across Asia at which gas will compete with coal. Instead, environmental initiatives and individual market influencers will determine the points at which the scales will tip in favour to gas. This is because Asia is not a singular gas market. Rather, it is a diverse range of markets with differing characteristics such as levels of economic development, fuel resources, market structures and government policies. The power markets are also discrete and have different dynamics even within some countries. Consequently, the factors that set the price at which gas will compete with coal differs between each market."
Wood Mackenzie's analysis points to China, South Korea and Malaysia as examples of this market diversity. Mr Tyler explains, "South Korea reflects a mature economy with an energy market dependent on imported fuels, and therefore has relatively high fuel costs. It has also introduced a carbon cap and trade scheme in January, which will favour gas due to its lower carbon content and thus; lower related carbon costs. Whereas in China, air quality is a key issue and gas-fired power generation is subsidized in some provinces. China is also introducing a national carbon trading scheme; and other markets are also implementing or looking at carbon initiatives. These factors all make gas the more attractive option."
Wood Mackenzie expects that pressure on the regulated price will allow an increase in gas-fired operation For example, Peninsular Malaysia is currently oversupplied with pipeline gas - a situation forecast to continue until 2020. Mr Tyler says "We have already seen delays to new-build coal plants currently under-construction in Malaysia. In a low commodity price world, where local gas production is over-supplied, if gas prices stay attractive we may see gas having a greater role. With weak gas prices and increasing environmental pressures, the cost of switching to gas-fired plants could become more economical. This shift in the competitive dynamic between coal and gas must now be front of mind for energy planners, utilities and fuel suppliers."
Wood Mackenzie says that Asia's strong long term economic growth will see power demand growth average 5% a year through to 2030, which will require over 2,000 gigawatts (GW) of additional power generation capacity to be built between now and then. With gas prices set to remain soft and increasing environmental pressures, it's likely gas will account for a higher proportion of this new power generation. As long as gas prices remain low, industry players need to continue to watch for individual market influencers to see where the most upside for gas may emerge
About Wood Mackenzie:
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions.
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Tuesday, 07 April 15
SUB-BIT FOB INDONESIA COAL SWAP KEEPS DROPPING; DROPPED 2% W-W
COALspot.com: Indonesian coal swap for delivery Q2 2015 declined month on month and week over week.
The Q2 swap was declined US$ 2.44 (5.14%) ...
Tuesday, 07 April 15
Q3 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 55.96 PMT; DOWN 8.40% M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has declined U ...
Monday, 06 April 15
INDONESIA'S HBA FIXED AT US$ 64.48 PMT FOR APRIL DELIVERY; DOWN 4.84% M-M
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal benchmark prices to US$ 64.48 per MT in Apr ...
Monday, 06 April 15
FOB NEWCASTLE COAL SWAP DECLINED 12% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 6.23 per MT (-12%) month over month and US$ 0.86 (-1.85%) week ...
Monday, 06 April 15
CFR SOUTH CHINA COAL SWAP FALL CONTINUES
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 5.96 (-10.37%) per MT month over month and US$ 0.98 (- ...
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- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- The University of Queensland
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
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