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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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Wednesday, 18 March 15
Q2 INDONESIAN COAL SWAP DROP 1.45% M-O-M; GAIN 0.63% W-O-W
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and gained week over week.
The Q2 swap fell US$ 0.70 (1.45%) ...
Tuesday, 17 March 15
RIO TINTO PAID US$ 7.1 BILLION IN TAXES IN 2014
COALspot.com: Rio Tinto has published its latest Taxes paid report, detailing the US$7.1 billion in taxes paid by the company around the world in 2 ...
Tuesday, 17 March 15
NEARLY 17% OF US COAL PRODUCTION UNECONOMIC AT CURRENT MARKET PRICING - WOOD MACKENZIE
COALspot.com: Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mi ...
Tuesday, 17 March 15
Q3' SA COAL SWAP CLOSED $57.30 PMT W/E 13 MARCH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and gained week on week.
The Q2 swap has fe ...
Monday, 16 March 15
MAKING THE WORLD GO ROUND - SEABORNE TRADE! - CLARKSONS
Money, or even love if you prefer, are claimed to make the world go round. For the shipping world, however, it’s trade that sets things spinn ...
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- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
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