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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, 11 March 15
DRY BULK MARKET CLOSED OFF ON THE GREEN FOR A SECOND WEEK IN A ROW - INTERMODAL
COALspot.com: The Dry Bulk market closed off on the green for a second week in a row, while the performance of Capesizes hindered a more substantia ...
Wednesday, 11 March 15
MARKET INSIGHT : NEWBUILDINGS - PANOS TSILINGIRIS
From a cost-based, buy-low perspective, there is currently a buying opportunity in the second-hand dry bulk market. I am an anti-cyclical (buy-low) ...
Wednesday, 11 March 15
DRY BULK MARKET: ALL IS NOT LOST FOR A RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The low cost of commodities across the board could trigger an increase of trade among many countries, which in turn could lead to a recovery of the ...
Wednesday, 11 March 15
U.S. ELECTRIC GENERATING COMPANIES TO ADD MORE THAN 20 GW OF GENERATING CAPACITY IN 2015; 16 GW OF GENERATING CAPACITY IS EXPECTED TO RETIRE IN 2015
COALspot.com: In 2015, electric generating companies in U.S. expect to add more than 20 gigawatts (GW) of utility-scale generating capacity to the ...
Tuesday, 10 March 15
OIL PRICE FORECASTING - IGNORE THE EXPERTS: COLIN MARSHALL
KNOWLEDGE TO ELEVATE
Experts put themselves on a pedestal, making claims to have special forecasting abilities for oil price trends. They, too ...
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- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Planning Commission, India
- White Energy Company Limited
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- VISA Power Limited - India
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
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