We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Thursday, 30 January 14
JPU SETTLEMENT PRICE AS A BENCHMARK WILL DECLINE IN IMPORTANCE BUT REMAIN RELEVANT, SAYS WOOD MACKENZIE
 JPU price will remain above spot, trending closer to spot till 2015 then increasing to 2035.
Japanese Power Utilities (JPU) are approaching a crucial negotiation period with Australian coal producers in March, when large volumes are contracted annually. Wood Mackenzie says market players can expect JPU prices to remain above market prices for the foreseeable future. As for price trends, JPUs will have to pay high premiums till 2015, before dipping from 2016 to 2020. Post-2020 to the longer term, premium over spot prices will trend upwards again. This is a result of a move away from JPU-type coal in key demand markets, which also acts to reduce the significance of JPU price as a benchmark, although not negating it altogether.
In the next few years the JPU premium over market price will remain high, settling below US$7 per tonne ($/t) by 2015. Mr Prakash Sharma, Asia Pacific Coal Market Analyst for Wood Mackenzie says, "Although global oversupply persists in the overall seaborne thermal coal market, for the highly specific JPU-type coal supply, the market will be progressively tight as other customers increase their consumption of this type of coal.”
In the medium term from 2016 to 2020, Wood Mackenzie forecasts a period where the JPU premium will decline to as low as US$3.80/t over market price as additional JPU-type supply is set to come online and producers seek to gain market share by competitively pricing their product. However, growth in demand for lower quality coal in key markets is impacting producers' product mix strategies; thus reducing the availability of JPU-type coal. This combined with a longer-term decline in JPU-type supply capacity is projected to support the premium over spot prices.
Mr Rory Simington, Coal Supply Research Analyst for Wood Mackenzie elaborates, "Fast growing demand markets of China, India and South Korea, to some degree are turning away from higher priced JPU-type low ash coal towards a more inexpensive higher ash product available on the spot market. Producers who have experienced low prices throughout 2013, and have had their margins squeezed, have reduced production costs by switching much of their incremental production towards this higher ash 5,500kcal/kg NAR market. This leaves the supply growth picture for JPU-type coal fairly flat."
Japanese power plants cannot absorb a higher ash product due to their ash disposal concerns and have only used relatively small amounts of low-ash sub-bituminous coal from Indonesia. Therefore JPUs will likely still demand predominantly JPU-type coal. However, Japan's role in the Asia Pacific coal market place will diminish as its proportion of the thermal market declines from 31% to only ten percent by 2035. Consequently, this reduces the significance of JPU price as a benchmark.
Mr Sharma says, "With the fairly flat supply growth outlook for JPU-type coal, a tighter market will result for Japanese procurement. JPUs are acutely aware of this development. Since Japan is completely reliant on coal imports, JPUs are willing to pay a premium over spot prices to lock-in the price for twelve months rather than risk supply availability by switching to index-linked pricing. This is crucial as we believe nuclear capacity in Japan will not return to pre-Fukushima levels. As such, other fuels including coal will need to play a larger role."
"Even if headlines suggest Japan is increasing imports from North America to reduce reliance on Australian producers, the negotiations are still of great importance to Japan as we do not foresee North American supply satisfying their requirements to the same extent Australian producers can." North America currently supplies two percent of Japan's thermal coal requirements. By 2025, Wood Mackenzie estimates North America will still only make up less than ten percent of Japan's thermal coal requirements.
For the longer term past 2020, Wood Mackenzie forecasts premia rising steadily again as the availability of JPU-type coal continues to decline. The margin between JPU settlement price and cost of JPU-type coal production will support the development of new projects. Therefore, JPUs will have to recognise the need to offer higher premiums in order to incentivise new supply. The steadily rising premium will reach US$5.50/t by 2027 and US$10/t in 2035 as higher cost coal projects are developed.
In summary, Mr Sharma says, "Japan recognises the need to secure supply and price stability. Therefore, JPUs favour contracts to the spot market, even at a premium. This will keep JPU pricing relevant albeit playing a diminishing role as a benchmark due to the growing market proportion of higher-ash coal in the region. In the longer term post-2020, this need will translate to JPUs having to pay higher premiums so as to incentivise Australian producers to maintain supply capacity. Hence, the JPU benchmark may lose the status of price-setter but will not likely become a price-taker even if it means that the premium will persist."
Wood Mackenzie's Editor’s notes:
JPU-type coal refers to the coal type imported by Japanese Power Utilities which is prime quality bituminous thermal coal (6322kcal/kg GAR) from Australia under term contracts.
Market prices refers to New FOB Newcastle Market Price @6000kcal/kg NAR. It is used interchangeably with the term 'spot price' in this news release.
About Wood Mackenzie
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
|
|
|
Showing 91 to 95 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- The University of Queensland
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Bhatia International Limited - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
|
| |
| |
|
