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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, 11 March 15
DRY BULK MARKET CLOSED OFF ON THE GREEN FOR A SECOND WEEK IN A ROW - INTERMODAL
COALspot.com: The Dry Bulk market closed off on the green for a second week in a row, while the performance of Capesizes hindered a more substantia ...
Wednesday, 11 March 15
MARKET INSIGHT : NEWBUILDINGS - PANOS TSILINGIRIS
From a cost-based, buy-low perspective, there is currently a buying opportunity in the second-hand dry bulk market. I am an anti-cyclical (buy-low) ...
Wednesday, 11 March 15
DRY BULK MARKET: ALL IS NOT LOST FOR A RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The low cost of commodities across the board could trigger an increase of trade among many countries, which in turn could lead to a recovery of the ...
Wednesday, 11 March 15
U.S. ELECTRIC GENERATING COMPANIES TO ADD MORE THAN 20 GW OF GENERATING CAPACITY IN 2015; 16 GW OF GENERATING CAPACITY IS EXPECTED TO RETIRE IN 2015
COALspot.com: In 2015, electric generating companies in U.S. expect to add more than 20 gigawatts (GW) of utility-scale generating capacity to the ...
Tuesday, 10 March 15
OIL PRICE FORECASTING - IGNORE THE EXPERTS: COLIN MARSHALL
KNOWLEDGE TO ELEVATE
Experts put themselves on a pedestal, making claims to have special forecasting abilities for oil price trends. They, too ...
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- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Australian Coal Association
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- White Energy Company Limited
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
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