Charting relative cost of thermal coal vs LNG in Northeast Asia reveals fresh insights

For power plant operators in Northeast Asia striving to optimize their operational efficiency, the prices of imported gas and thermal coal are clearly key considerations. But a direct comparison between the two fuel sources for power generation is not an easy one to make, given they are traded in different units of energy content. Thermal coal is traded on the basis of its calorific value or heating content on a kilocalories per kilogram basis, and its volume priced in US dollars per metric ton. LNG is priced on the basis of US dollars per million British thermal units, or $/MMBtu. The most common way to compare like with like is to convert seaborne thermal coal prices into the same unit of measurement as LNG, in this case $/MMBtu. S&P Global Platts publishes a daily price assessment for LNG shipped to Japan, South Korea and Taiwan on a delivered ex-ship basis — its JKM Marker. Platts also publishes a daily price assessment for Australian thermal coal shipped to Japan’s Kinuura port — the Northeast Asia Thermal Coal index, abbreviated to NEAT. The NEAT index is for 5,750 kcal/kg NAR thermal coal shipped from Australia’s Newcastle port to Japan and includes indicative… continue reading

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Source: CTRM Center

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