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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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Friday, 13 March 15
ADARO RECORDED A 7% INCREASE IN EBITDA OF $877 MILLION IN 2014
“Coal market continues to be difficult and challenging” – Adaro Energy
The world’s Top 5 thermal coal exporter, ...
Thursday, 12 March 15
CAPESIZE : ACTIVITY IS LOW; PANAMAX: BIT MORE ACTIVITY; HANDY: A FIRMING WEEK
Handy
It has been a firming week in both hemispheres this week and especially in the Pacific, says Fearnleys AS in its week's week report.
...
Thursday, 12 March 15
COAL MINERS REMAIN UNDER PRESSURE AS GLUT CONTINUES - THE JAKARTA POST
Indonesia’s major coal miners reported a significant drop in their earnings last year as the sharp drop in the global demand, mainly from Chi ...
Thursday, 12 March 15
FOB INDONESIA COAL SWAP DROP TO $47.33 A TON IN THE WEEK ENDED MAR.6
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and week over week.
The Q2 swap fell US$ 0.37 (0.78%) month ...
Wednesday, 11 March 15
RICHARDS BAY COAL SWAPS DROP $ 3.65 - 4.0/T W-O-W
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 fell US$ ...
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- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Economic Council, Georgia
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- PTC India Limited - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- White Energy Company Limited
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- The University of Queensland
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
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