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Published

Presentation at McCloskey Russian Coal Markets Conference at St.Petersburg, 2009

Presentation at McCloskey Russian Coal Markets Conference at St.Petersburg, 2009

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Transcript

  • 1. European, Asian or Domestic - which market is to attract Russian coal and which be left short of it? Russian Coal Markets Conference 2009
  • 2. In spite of reduction in prices the volumes for export are still high Russian coal supply by market segment for first 7 months 2009, thousand tons. 185,699 ‐14% 160,155 Source:
TsDU
TEK
  • 3. It’s a common knowledge that Russia is a marginal supplier on the world market… $/t Russian
CIF
ARA
cash
cost
compeBBve
posiBoning,
$/t
2008 80 Current
Price level 60 Indonesia Russia USA Russia 40 Australia South
Africa Columbia 20 South
Africa 40 80 120 160 Source:
Wood
&
MacKenzie
  • 4. …and as it is marginal it is a price setter on the market. Russian Delivered Coal Cost vs Price on the market (API2) (CIF ARA) 72 70 59 89 Source:
TsDU
TE,
Rosinformugol,
PlaGs
  • 5. Export volumes of Russian coal are growing in spite of the crises Reasons Outlook Jump
in
China
coal
import
to
23
mln.
T
in
first
7 Most
probably
rapid
growth
of
import
in
China months
2009
(Russia
increased
supply
from
0,2 will
con[nue to
3,81
same
period) Growth
of
coal
demand
in
India
(NTPC
is Gas
wars
between
Europe,
Russia
and
Ukraine conduc[ng
nego[a[ons
on
mine
purchases
in brought
to
decrease
of
gas
supply
and
thus South
Africa,
Australia,
Indonesia) subs[tu[on
of
gas
by
coal
in
power
genera[on. Profitability
of
export
may
stay
low
for
long Decrease
of
supply
of
South‐African
coal
to period.
Possible
increase
in
railway
tariffs. Europe BoGleneck
on
railway
line
to
Vanino
port
will New
port
capacity
(Vanino
‐
+up
to
6‐7
mtpa not
allow
port
to
operate
at
full
capacity. and
Ust‐Luga
+4‐8
mtpa) (According
to
some
data
only
6
mtpa
of
railway capacity
is
available
for
Vanino
coal
terminal) Inability
of
Russian
coal
producers
and
traders to
sa[sfy
needs
of
Genco’s
(Coal contamina[on,
flexibility
in
co‐investments) Decrease
of
steam
coal
supply
from
3,29
to 2,63
mt
for
the
first
6
months
2009 Source:
Rosinformugol,
McCloskey
Fax
  • 6. Domestic power sector has decrease significantly and is expected to recover slowly Reasons Outlook Industrial
produc[on
has
decreased
more
then Slow
industrial
produc[on
revival
has
started, 10% as
a
consequence
growth
of
electricity
demand Decrease
in
electricity
produc[on
for
7
months Subs[tu[on
of
electricity
genera[on
ajer 2009
‐
6,4%
(540
bln
Kwt/h)
with
thermal Sayano‐Shushenskaya
GES
breakdown
by plants
‐
11,6%
(327,5
bln
Kwt/h) thermal
power
plants High
water
and
thus
high
load
of
hydro
power plants. Source:
TsDU
TEK
  • 7. Additional demand for 3,2 mtpa of hard coal and 7,5 mtpa of lignite for domestic power generation as a result of Sayano-Shushenskaya GES breakdown Sayano-Shushenskaya GES full installed capacity - 6400 MWt. Average annual load - 4500 MWt. After the breakdown - 3 blocks are totally destroyed and will require about 4 years to reconstruct. 7 blocks are partially damaged and will require 1-1,5 years to relaunch. Additional capacity put into operation from reserve to substitute Sayano-Shushenskaya GES capacity Addi[onal
capacity
put
into Company Power
plant Fuel
type opera[on OGK‐3 Kostromskaya
GRES +1200
MWt 
Gas TGK‐12 Tom‐Usinskaya
GRES +900
MWt Coal Belovskaya
GRES Kemerovskaya
GRES Up
to
+
3,2
mtpa Novo‐Kemerovskaya
GRES TGK‐13 Nazarovskaya
GRES +920
MWt Lignite
up
to
+4.1
mtpa OGK‐6 Krasnoyarskaya
GRES‐2 +
750
MWt Lignite
up
to
+3,4
mtpa Irkutskenergo Bratskaya
GES +1300
MWt Hydro En+ Krasnayarskaya
GES ? Hydro TGK‐11 Tomskaya
GRES +
500
MWt Gas Omskaya
TETs
3,4,5 Source:
Vedomos[,
Interfax,
Rosinformugol
  • 8. Russian coal prospects look quite optimistic on all three markets Export Atlantic market - demand is strong, but supply of Russian coal is under pressure due to high cost of transportation through Baltic countries ports and expected increase of railway tariffs. Export Pacific market - demand is strong and growing, thanks to China and India. New port capacity launched in the beginning of this year. Domestic market for power generation - weakness because of crises, but rebound due to Sayano-Shushenskaya GES breakdown.
  • 9. Thank you for your attention! Igor Shelukhin Director on Strategy and Development Coal Market Research Institute + 7 926 535 3435 Ishell@post.ru