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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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Tuesday, 10 March 15
FOB NEWCASTLE COAL SWAPS HEADING SOUTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 0.24 per MT (-0.47%) month over month and US$ 1.52 (-2.93%) we ...
Tuesday, 10 March 15
CFR SOUTH CHINA POWER-STATION COAL SWAPS DECLINE
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery fell US$ 0.42 (-0.74%) per MT month over month and declined US$ 1.00 &nbs ...
Monday, 09 March 15
INDONESIA GREETS INDIA RATE CUT AS GOOD FOR EXPORTS - GLOBEASIA
Indonesian commodity producers and economists have hailed the Indian central bank’s rate cut as good for boosting exports from Southeast Asia ...
Monday, 09 March 15
CHINA'S SUPREME COURT ISSUES NEW JUDICIAL INTERPRETATION ON SHIP ARREST AND JUDICIAL SALE OF SHIPS - GARD
KNOWLEDGE TO ELEVATE
China is not traditionally a popular jurisdiction for ship arrest. However, Members and clients with ships calling at por ...
Monday, 09 March 15
CHINA'S IMPORTS - NEVER MORE IMPORTANT TO SHIPPING? - CLARKSONS
Over the last 15 years China has led maritime forecasters a right old dance. In 2002, rumours that Chinese iron ore imports were about to take off ...
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- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- The University of Queensland
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Videocon Industries ltd - India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
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