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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, 16 March 15
API 5 FOB NEWCASTLE COAL SWAPS: DECLINED
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 2.48 per MT (-4.77%) month over month and US$ 0.93 (-1.84%) we ...
Monday, 16 March 15
CFR SOUTH CHINA THERMAL COAL SWAP DECLINED 3.74% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 2.17 (-3.74%) per MT month over month and US$ 0.67 (-1 ...
Sunday, 15 March 15
BDI DECLINED LESSER THAN 1% WEEK OVER WEEK; INDO-INDIA FIRM
COALspot.com: The most of indices, including bulk dry index were falling this week. The BDI has been down by just 0.53 points and closing at 562 po ...
Saturday, 14 March 15
CAPESIZE DRY BULKERS TO AVERAGE BETWEEN $3,000 AND $9,000/DAY IN THE COMING WEEKS SAYS BIMCO
BIMCO issued its latest short-term estimates for the dry bulk market. For March/May: BIMCO assesses that the Capesize time charter (T/C) average ra ...
Friday, 13 March 15
U.S. COAL PRODUCTION UP 2.3% WEEK OVER WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.5 million short tons (mmst) of coal ...
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- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Planning Commission, India
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
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