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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, 22 April 15
TANKER MARKET INSIGHT - STRATOS TINIAKOS
The current environment we experience as a result of low crude oil prices is characterized by the increased demand for petroleum products in OECD c ...
Tuesday, 21 April 15
SUB-BIT FOB INDONESIA COAL SWAP: GAINED W-O-W; DECLINED M-O-M
COALspot.com: Indonesian coal swap for delivery Q2 2015 gained week over week and declined month on month.
The Q2 swap was declined US$ 1.75 ( ...
Tuesday, 21 April 15
FOB RICHARDS BAY COAL SWAP MOVE UP SLIGHTLY
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 increased slightly month over month.
The Q2 swap has increased US$ 0.2 ...
Monday, 20 April 15
BUKIT ASAM TAKES OVER STAKE IN JV FROM RAJAWALI - JP
State-owned coal miner PT Bukit Asam (PTBA) announced Friday that it had taken over almost the entire stake in a joint venture (JV) that it created ...
Monday, 20 April 15
FOB NEWCASTLE COAL SWAP GAINED WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 3.54 per MT (-7.21%) month over month and gained US$ 0.30 week ...
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- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Australian Coal Association
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- The University of Queensland
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
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