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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, 23 March 15
CFR SOUTH CHINA COAL SWAP: Q3 DELIVERY HAS FALLEN 7.93% MONTH-ON-MONTH
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 4.09 (-7.06%) per MT month over month and US$ 2.00 (-3 ...
Monday, 23 March 15
SEABORNE WORLD COAL TRADE: GROWTH +5% - GERMAN COAL IMPORTER ASSOCIATION
Hard Coal Market 2014: Despite The Energy Turnaround, Hard Coal Imports To Germany Rise By More Than 6%, Although Hard Coal-Fired Power Generation ...
Sunday, 22 March 15
DRY BULK RATES CONTINUED TO RISE THIS WEEK
COALspot.com: The freight market was steady this week as all the segments increased after many weeks of weak trend.
The Baltic Dry Index (BDI) ...
Friday, 20 March 15
HARD COAL MARKET 2014: DESPITE THE ENERGY TURNAROUND, HARD COAL IMPORTS TO GERMANY RISE BY MORE THAN 6% (PART 1)
Hard Coal Market 2014: Despite The Energy Turnaround, Hard Coal Imports To Germany Rise By More Than 6%, Although Hard Coal-Fired Power Generation ...
Friday, 20 March 15
U.S. WEEKLY COAL PRODUCTION SHOWS 5.9% INCREASE WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.5 million short tons (mmst) of coal ...
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- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
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