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.
|
|
Thursday, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
|
|
|
Showing 131 to 135 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Deloitte Consulting - India
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- PTC India Limited - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- MS Steel International - UAE
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
|
| |
| |
|
