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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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Monday, 23 March 15
CFR SOUTH CHINA COAL SWAP: Q3 DELIVERY HAS FALLEN 7.93% MONTH-ON-MONTH
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 4.09 (-7.06%) per MT month over month and US$ 2.00 (-3 ...
Monday, 23 March 15
SEABORNE WORLD COAL TRADE: GROWTH +5% - GERMAN COAL IMPORTER ASSOCIATION
Hard Coal Market 2014: Despite The Energy Turnaround, Hard Coal Imports To Germany Rise By More Than 6%, Although Hard Coal-Fired Power Generation ...
Sunday, 22 March 15
DRY BULK RATES CONTINUED TO RISE THIS WEEK
COALspot.com: The freight market was steady this week as all the segments increased after many weeks of weak trend.
The Baltic Dry Index (BDI) ...
Friday, 20 March 15
HARD COAL MARKET 2014: DESPITE THE ENERGY TURNAROUND, HARD COAL IMPORTS TO GERMANY RISE BY MORE THAN 6% (PART 1)
Hard Coal Market 2014: Despite The Energy Turnaround, Hard Coal Imports To Germany Rise By More Than 6%, Although Hard Coal-Fired Power Generation ...
Friday, 20 March 15
U.S. WEEKLY COAL PRODUCTION SHOWS 5.9% INCREASE WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.5 million short tons (mmst) of coal ...
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- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- PTC India Limited - India
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
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