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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, 19 March 15
HANDY: INDO COAL CARGOS DESTINED FOR INDIA BEING FIXED IN REGION OF $ 7-8K - FEARNLEYS
Handy
The Handy and Supra market has had a week with mixed signals. Although we see more activity in both hemispheres the rates are only up about ...
Thursday, 19 March 15
INDONESIAN COAL BENCHMARK SOAR 7.69% IN MARCH....!!!
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised up Indonesian coal benchmark prices to US$ 67.76 per MT in March ...
Wednesday, 18 March 15
AVERAGE RATE FOR CAPES MOVED TO BELOW $ 4K/DAY LAST WEEK - INTERMODAL
COALspot.com: The even heavier losses noted in the Capesize segment last week, denied the Dry Bulk market a third weekly positive, while the smalle ...
Wednesday, 18 March 15
PARKING THE CAPES - LINOS KOGEVINAS
It is no secret that recent times have been anything but kind towards shipping, and no sector has suffered more lately than the dry bulk one. While ...
Wednesday, 18 March 15
CHINA-OWNED SHIPS: A RAPID RISE TO BECOME ONE OF THE WORLD'S LARGEST FLEETS - RICHARD SCOTT
Ships operated by owners based in China have become increasingly prominent on the world’s sea routes. China-owned container ships, bulk carri ...
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- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Australian Coal Association
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- The University of Queensland
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
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