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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, 24 March 15
A WEAK WEEK FOR FOB INDONESIA COAL SWAP
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and week over week.
The Q2 swap fell US$ 2.48 (5.12%) month ...
Tuesday, 24 March 15
RICHARDS BAY COAL SWAP FOR DELIVERY Q2 CLOSED $ 1.87 HIGHER COMPARED TO Q3 CLOSING PRICE
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has dropped U ...
Tuesday, 24 March 15
ARGUS MEDITERRANEAN SOLID FUELS 2015 CONFERENCE | 2-3 JUNE, ISTANBUL
Press Release: Argus Media is proud to announce Argus Mediterranean Solid Fuels, which will be held in Istanbul,on 2-3February.
Argus produces ...
Monday, 23 March 15
IS OIL GETTING READY TO PLUNGE BELOW $40? - FORBES
KNOWLEDGE TO ELEVATE
In my last crude oil market update in late-February, I expressed my skepticism toward the oil price rebound. Since then, ...
Monday, 23 March 15
Q4' 2015 FOB NEWCASTLE COAL SWAPS DECLINED 6.79% M-O-M; 2.55% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 3.42 per MT (-6.33%) month over month and US$ 1.37 (-2.77%) we ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Australian Coal Association
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Independent Power Producers Association of India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Marubeni Corporation - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
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