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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, 16 March 15
API 5 FOB NEWCASTLE COAL SWAPS: DECLINED
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 2.48 per MT (-4.77%) month over month and US$ 0.93 (-1.84%) we ...
Monday, 16 March 15
CFR SOUTH CHINA THERMAL COAL SWAP DECLINED 3.74% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 2.17 (-3.74%) per MT month over month and US$ 0.67 (-1 ...
Sunday, 15 March 15
BDI DECLINED LESSER THAN 1% WEEK OVER WEEK; INDO-INDIA FIRM
COALspot.com: The most of indices, including bulk dry index were falling this week. The BDI has been down by just 0.53 points and closing at 562 po ...
Saturday, 14 March 15
CAPESIZE DRY BULKERS TO AVERAGE BETWEEN $3,000 AND $9,000/DAY IN THE COMING WEEKS SAYS BIMCO
BIMCO issued its latest short-term estimates for the dry bulk market. For March/May: BIMCO assesses that the Capesize time charter (T/C) average ra ...
Friday, 13 March 15
U.S. COAL PRODUCTION UP 2.3% WEEK OVER WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.5 million short tons (mmst) of coal ...
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- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
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