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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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Thursday, 16 April 15
SHIPPING DEMAND TO SUFFER AS CHINESE SLOWDOWN CONFIRMED SAYS BIMCO'S CHIEF SHIPPING ANALYST - BIMCO
The Chinese economy grew by 7.0% y-o-y in the first quarter of 2015, according to National Bureau of Statistics in China. This is the weakest overa ...
Thursday, 16 April 15
INDIA: COAL IMPORTS RISE BY 33 PC TO 240 MT IN FY'15 - PTI
India’s coal imports in the just concluded FY 2015 increased by 33 per cent to about 240 million tonnes.
“Coal import have gone up ...
Thursday, 16 April 15
CAPESIZE: THE SUPPLY AND DEMAND SIDE ARE NOW SUFFERING HEAVILY - FEARNLEYS
Handy
It seems to be some standoff between owners and charterers in both hemispheres this week. Owners are raising their rates while charterers a ...
Thursday, 16 April 15
Q3 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 55.67 PMT
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month.
The Q2 swap has declined US$ 1.90 (3.17%) m ...
Wednesday, 15 April 15
PORT OF NEWCASTLE SHIPPED 13.63 MMT OF COAL IN MARCH; UP 4.41% M-O-M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.227 billi ...
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- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- VISA Power Limited - India
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Australian Coal Association
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
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