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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, 24 March 15
A WEAK WEEK FOR FOB INDONESIA COAL SWAP
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and week over week.
The Q2 swap fell US$ 2.48 (5.12%) month ...
Tuesday, 24 March 15
RICHARDS BAY COAL SWAP FOR DELIVERY Q2 CLOSED $ 1.87 HIGHER COMPARED TO Q3 CLOSING PRICE
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has dropped U ...
Tuesday, 24 March 15
ARGUS MEDITERRANEAN SOLID FUELS 2015 CONFERENCE | 2-3 JUNE, ISTANBUL
Press Release: Argus Media is proud to announce Argus Mediterranean Solid Fuels, which will be held in Istanbul,on 2-3February.
Argus produces ...
Monday, 23 March 15
IS OIL GETTING READY TO PLUNGE BELOW $40? - FORBES
KNOWLEDGE TO ELEVATE
In my last crude oil market update in late-February, I expressed my skepticism toward the oil price rebound. Since then, ...
Monday, 23 March 15
Q4' 2015 FOB NEWCASTLE COAL SWAPS DECLINED 6.79% M-O-M; 2.55% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 3.42 per MT (-6.33%) month over month and US$ 1.37 (-2.77%) we ...
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- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- MS Steel International - UAE
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- PTC India Limited - India
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
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