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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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Sunday, 05 April 15
FREIGHT RATES UNDER PRESSURE WEEK OVER WEEK
COALspot.com: The Indices fell on all segments and the market seemed to soften this week.
The BDI was almost lost 1.34% week over week and clo ...
Saturday, 04 April 15
BORYEONG POWER OF KOMIPO TO BUY TOTALED 695K MT OF HIGH AND LCV COAL
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 500000 Metr ...
Friday, 03 April 15
U.S WEEKLY COAL PRODUCTION STAYS FLAT
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 18.3 million short ...
Friday, 03 April 15
TOBA BARA'S PANDU SJAHRIR ELECTED AS NEW CHAIRMAN OF THE INDONESIAN COAL MINING ASSOCIATION
COALspot.com: Pandu Sjahrir, the Vice President Director & CFO of the Jakarta-listed PT Toba Bara Sejahtra — a subsidiary of PT Toba Seja ...
Thursday, 02 April 15
GOVERNMENT MUST WORK WITH MINING, NOT AGAINST IT - PANDU SJAHRIR
The Coal Face: The coal price has hit its lowest point in recent memory
My father used to say to me that his children are his biggest inv ...
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- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Planning Commission, India
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Indika Energy - Indonesia
- PTC India Limited - India
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- The University of Queensland
- CNBM International Corporation - China
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