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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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Friday, 13 March 15
ADARO RECORDED A 7% INCREASE IN EBITDA OF $877 MILLION IN 2014
“Coal market continues to be difficult and challenging” – Adaro Energy
The world’s Top 5 thermal coal exporter, ...
Thursday, 12 March 15
CAPESIZE : ACTIVITY IS LOW; PANAMAX: BIT MORE ACTIVITY; HANDY: A FIRMING WEEK
Handy
It has been a firming week in both hemispheres this week and especially in the Pacific, says Fearnleys AS in its week's week report.
...
Thursday, 12 March 15
COAL MINERS REMAIN UNDER PRESSURE AS GLUT CONTINUES - THE JAKARTA POST
Indonesia’s major coal miners reported a significant drop in their earnings last year as the sharp drop in the global demand, mainly from Chi ...
Thursday, 12 March 15
FOB INDONESIA COAL SWAP DROP TO $47.33 A TON IN THE WEEK ENDED MAR.6
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and week over week.
The Q2 swap fell US$ 0.37 (0.78%) month ...
Wednesday, 11 March 15
RICHARDS BAY COAL SWAPS DROP $ 3.65 - 4.0/T W-O-W
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 fell US$ ...
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- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Planning Commission, India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
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