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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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Wednesday, 18 March 15
Q2 INDONESIAN COAL SWAP DROP 1.45% M-O-M; GAIN 0.63% W-O-W
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and gained week over week.
The Q2 swap fell US$ 0.70 (1.45%) ...
Tuesday, 17 March 15
RIO TINTO PAID US$ 7.1 BILLION IN TAXES IN 2014
COALspot.com: Rio Tinto has published its latest Taxes paid report, detailing the US$7.1 billion in taxes paid by the company around the world in 2 ...
Tuesday, 17 March 15
NEARLY 17% OF US COAL PRODUCTION UNECONOMIC AT CURRENT MARKET PRICING - WOOD MACKENZIE
COALspot.com: Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mi ...
Tuesday, 17 March 15
Q3' SA COAL SWAP CLOSED $57.30 PMT W/E 13 MARCH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and gained week on week.
The Q2 swap has fe ...
Monday, 16 March 15
MAKING THE WORLD GO ROUND - SEABORNE TRADE! - CLARKSONS
Money, or even love if you prefer, are claimed to make the world go round. For the shipping world, however, it’s trade that sets things spinn ...
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- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- The University of Queensland
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
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