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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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Tuesday, 10 March 15
FOB NEWCASTLE COAL SWAPS HEADING SOUTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 0.24 per MT (-0.47%) month over month and US$ 1.52 (-2.93%) we ...
Tuesday, 10 March 15
CFR SOUTH CHINA POWER-STATION COAL SWAPS DECLINE
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery fell US$ 0.42 (-0.74%) per MT month over month and declined US$ 1.00 &nbs ...
Monday, 09 March 15
INDONESIA GREETS INDIA RATE CUT AS GOOD FOR EXPORTS - GLOBEASIA
Indonesian commodity producers and economists have hailed the Indian central bank’s rate cut as good for boosting exports from Southeast Asia ...
Monday, 09 March 15
CHINA'S SUPREME COURT ISSUES NEW JUDICIAL INTERPRETATION ON SHIP ARREST AND JUDICIAL SALE OF SHIPS - GARD
KNOWLEDGE TO ELEVATE
China is not traditionally a popular jurisdiction for ship arrest. However, Members and clients with ships calling at por ...
Monday, 09 March 15
CHINA'S IMPORTS - NEVER MORE IMPORTANT TO SHIPPING? - CLARKSONS
Over the last 15 years China has led maritime forecasters a right old dance. In 2002, rumours that Chinese iron ore imports were about to take off ...
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- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- GMR Energy Limited - India
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- PTC India Limited - India
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Minerals Council of Australia
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
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