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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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Thursday, 19 March 15
HANDY: INDO COAL CARGOS DESTINED FOR INDIA BEING FIXED IN REGION OF $ 7-8K - FEARNLEYS
Handy
The Handy and Supra market has had a week with mixed signals. Although we see more activity in both hemispheres the rates are only up about ...
Thursday, 19 March 15
INDONESIAN COAL BENCHMARK SOAR 7.69% IN MARCH....!!!
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised up Indonesian coal benchmark prices to US$ 67.76 per MT in March ...
Wednesday, 18 March 15
AVERAGE RATE FOR CAPES MOVED TO BELOW $ 4K/DAY LAST WEEK - INTERMODAL
COALspot.com: The even heavier losses noted in the Capesize segment last week, denied the Dry Bulk market a third weekly positive, while the smalle ...
Wednesday, 18 March 15
PARKING THE CAPES - LINOS KOGEVINAS
It is no secret that recent times have been anything but kind towards shipping, and no sector has suffered more lately than the dry bulk one. While ...
Wednesday, 18 March 15
CHINA-OWNED SHIPS: A RAPID RISE TO BECOME ONE OF THE WORLD'S LARGEST FLEETS - RICHARD SCOTT
Ships operated by owners based in China have become increasingly prominent on the world’s sea routes. China-owned container ships, bulk carri ...
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- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Posco Energy - South Korea
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Planning Commission, India
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
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