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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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Monday, 20 April 15
Q4' 2015 API 8 CFR SOUTH CHINA COAL SWAP CLOSED US$ 50.28 PMT
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 4.03 (-7.28%) per MT month over month and US$ 0.05 (-0 ...
Sunday, 19 April 15
THE OCEAN FREIGHT MARKET SHOWED STEADY THIS WEEK
COALspot.com: The freight market was fairly steady this week. The BDI was up 2.93% to 597 points week over week. The cape index was also increased ...
Friday, 17 April 15
IHS ENERGY EUROPEAN COAL OUTLOOK CONFERENCE
Attend the IHS Energy European Coal Outlook Conference 19-20 May in Nice, France and learn about timely concerns in today’s coal industry.
...
Friday, 17 April 15
COAL PRODUCTION IN THE U.S. UP THIS PAST WEEK - EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 18.0 million short ...
Thursday, 16 April 15
NEW COMMODITY SUPERHIGHWAY WILL EMERGE IN CHINA, ALTERING ENERGY TRADE FLOWS - WOOD MACKENZIE
Wood Mackenzie says that China’s Go West strategy – encouraging coastal to inland flow of capital and people - will result in the forma ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- PTC India Limited - India
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- London Commodity Brokers - England
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Economic Council, Georgia
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
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