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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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Tuesday, 07 April 15
SUB-BIT FOB INDONESIA COAL SWAP KEEPS DROPPING; DROPPED 2% W-W
COALspot.com: Indonesian coal swap for delivery Q2 2015 declined month on month and week over week.
The Q2 swap was declined US$ 2.44 (5.14%) ...
Tuesday, 07 April 15
Q3 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 55.96 PMT; DOWN 8.40% M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has declined U ...
Monday, 06 April 15
INDONESIA'S HBA FIXED AT US$ 64.48 PMT FOR APRIL DELIVERY; DOWN 4.84% M-M
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal benchmark prices to US$ 64.48 per MT in Apr ...
Monday, 06 April 15
FOB NEWCASTLE COAL SWAP DECLINED 12% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 6.23 per MT (-12%) month over month and US$ 0.86 (-1.85%) week ...
Monday, 06 April 15
CFR SOUTH CHINA COAL SWAP FALL CONTINUES
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 5.96 (-10.37%) per MT month over month and US$ 0.98 (- ...
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- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- VISA Power Limited - India
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Marubeni Corporation - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
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