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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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Sunday, 05 April 15
FREIGHT RATES UNDER PRESSURE WEEK OVER WEEK
COALspot.com: The Indices fell on all segments and the market seemed to soften this week.
The BDI was almost lost 1.34% week over week and clo ...
Saturday, 04 April 15
BORYEONG POWER OF KOMIPO TO BUY TOTALED 695K MT OF HIGH AND LCV COAL
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 500000 Metr ...
Friday, 03 April 15
U.S WEEKLY COAL PRODUCTION STAYS FLAT
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 18.3 million short ...
Friday, 03 April 15
TOBA BARA'S PANDU SJAHRIR ELECTED AS NEW CHAIRMAN OF THE INDONESIAN COAL MINING ASSOCIATION
COALspot.com: Pandu Sjahrir, the Vice President Director & CFO of the Jakarta-listed PT Toba Bara Sejahtra — a subsidiary of PT Toba Seja ...
Thursday, 02 April 15
GOVERNMENT MUST WORK WITH MINING, NOT AGAINST IT - PANDU SJAHRIR
The Coal Face: The coal price has hit its lowest point in recent memory
My father used to say to me that his children are his biggest inv ...
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- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Aditya Birla Group - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
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