Australia Coal and Laos Power: Operational and Financial Summary
Global thermal coal market trends: 2016 vs 2015
BANPU
SUPPLY TRENDS
Production cuts move slowly. Sharp drop in oil price, FX and
productivity gains help to reduce producer costs significantly.
Low sea freight rates favor distant supply
DEMAND TRENDS
Economic slowdown and demand uncertainty in China and
India are key market depressants but capacity additions boost
demand elsewhere. Most buyers are increasing preference for
higher quality coals due to steep falling coal price.
USA: low gas prices;
limited new coal buying
due to high stockpiles;
significant production
cuts are required;
uncompetitive in export
market.
Colombia: lowest
cost supplier in
Europe; depreciation
of local currency
improves
competitiveness;
social issues remain
South Africa :
depreciation of local
currency improves
competitiveness;
continued political and
social issues; limited rail
capacity; uncertain
expansion
Russia significant cost
reduction due to weaker
ruble; increased
competitiveness in Asia
especially on high CV
coal
Indonesia: a big hit
from China declines
and India slow down;
significant loss market
share in China as they
respond to the changes
slower than Australia;
huge oversupply on
LCV coal
Australia: take-or-pay
continues to force
producers to export
more coal, cost
reduction and currency
depreciation assist
Europe low gas
price; gas-switching;
growing environmental
pressures; coal plant
retirements and
increased renewable
energy will limit import
demand
India: import
slowdown due to
weak power demand
and strong growth in
domestic coal
production; power
distributor
companies are facing
losses and limit their
ability to buy power;
high coal stocks
China:
Industrial
over-capacity,
weak power
demand, RMB
depreciation,
continued
protectionism
policy, but
stabilizing coal
prices
Other Asia
Philippines, Malaysia,
Vietnam, South
Korea and Taiwan
are expected to
commission 10-12
GW of new capacity
this year
Global Indonesia Australia Colombia Russia S.Africa USA
Others
Global
China*
India
+10 Mt +2 Mt +| Mt
Other
N.Asia
+8 Mt
Europe
Others
+5 Mt
+I Mt
-3 Mt
-6 Mt
-4 Mt
-7 Mt
-25 Mt -30 Mt
-18 Mt
-30 Mt
Note: *includes anthracite and lignite
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