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Thursday, 25 November 10
ANALYSIS: COAL SECTOR: VALUE EMERGENCE - THE JAKARTA POST
 Coal demand will remain firm due to a build-up of coal-fired power plants in India, China and Indonesia. As a result, we have upgraded our coal price from US$95 per ton to a range of between $100, 105, 108, 110 and 115 per ton, respectively in 2011, 2012, 2013, 2014 and 2015 (inflation rate of 1 percent thereafter).
Additionally, Indonesia is one of the lowest cost coal producers in the world, which means that coal prices have to adjust with the incremental cost of production of higher-cost structured companies.
Thermal Seaborne coal demand is set to rise by 74 percent to 1,187 million tons in 2025 from 680 million tons in 2010, according to Coaltrans Coal Conference in Amsterdam last month. This is driven by a higher demand from China and India, which currently accounts for about 28 percent of the global thermal coal market.
China, which currently relies on coal to produce 80 percent of its power needs, is installing two new coal-fired power plants per week with capacities of 500 megawatts per plant. This pace will persist at least in the next decade, potentially doubling power capacity by 2020 and adding a 500-gigawatts new coal-fired electricity generation capacity according to the International Energy Agency. We highlight that with China consuming 43 percent of the global thermal coal production, imbalances between its indigenous production and consumption will drive global coal prices higher.
As for India, at present it imports about 8 percent of global coal production. But the number is set to grow to 25 percent by 2015. Indian thermal coal demand is expected to rise 810 million tons, or 131 percent, by 2025, driven by a 158 percent hike in coal-fired power capacity, in line with power demand, which will rise from the current 147 gigawatts to 380 gigawatts by 2025.
Meanwhile, Vietnam, which three years ago was the largest exporter of coal to China, is expected to become a net importer by 2015, putting further pressure on global supply in the medium term. Vietnam currently exports about 50 percent of its production or about 24 million tons, but this will fall to only 3 million tons, despite rising coal production from 48 million tons in 2009 to about 105 million tons in 2025.
Stripping out PT Bayan Resources’ (BYAN’s) price movements, the coal sector has underperformed the market by 9.8 percent year-to-date (ytd). We believe value is emerging, particularly for our top picks, and we raise our sector weighting to overweight.
At this stage, PT Bukit Asam (PTBA) has the highest upside potential based on Discounted Cash Flow (DCF), helped by the inclusion of the Banjarsari power project in our forecasts. We like PTBA’s railway expansion projects, which will increase PTBA’s railway capacity from 11 million tons currently to 47.7 million tons by 2015 or 82.7 million tons by 2018.
This will increase fourfold PTBA’s production from 12.7 million tons to 52.5 million tons by 2015 or by seven fold to 87.5 million tons by 2018. We also like PTBA for its government link, translating to more secured supply contracts to PLN. Additionally, we like its huge reserves (fives times Indonesia’s coal production), which will pave the way for it to become the second-largest coal producer after BUMI starting in 2018.
This means 33 percent compound annual growth rate (CAGR) for earning per share (EPS) in the next five years through 2015. It also has cash reserves of Rp 4.9 trillion with no debt and solid corporate governance. Our second pick is PT Indika Energy or INDY (+27 percent upside), due to Kideco’s strong performance (which contributes 76 percent of its pre-tax profit). This is followed by Adaro Energy (+19 percent), the largest market cap and second-highest average daily turnover after BUMI, which plans to nearly double production from about 42 million tons in 2010 to 80 million tons by 2014.
Surabhi Chopra, The writer is an analyst at PT Bahana Securities Source: The Jakarta Post
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Thursday, 17 February 11
UNCERTAINTY AND VOLATILITY - FEARNBULK
Handy
Recovering market as evidenced by the solid USD 16k/day achieved by a handymax from Continent to east Med with scrap. More short period requ ...
Tuesday, 15 February 11
INDONESIAN COAL FOR HARYANA THERMAL PLANTS - PUNJAB NEWS LINE
To tide over the recurring coal shortage at thermal plants Haryana Power Generation Corporation Limited (HPGCL) has gone for Malaysian coal for its ...
Tuesday, 15 February 11
TONNAGE OVERSUPPLY TO CHOKE FREIGHT RATES IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In a new report assessing the dry bulk market, BIMCO’s analysis suggests that freight rates for Capesize vessels are likely to remain depresse ...
Sunday, 13 February 11
COAL MARKETS 2011 TO HIGHLIGHT INDONESIAN COAL AND NEW SOURCES OF COAL SUPPLY
“Over 300 senior decision-makers from coal mining, power and trading companies expected to congregate in Singapore”
Press Release - K ...
Sunday, 13 February 11
YEAR OF RABBIT PUSHING FREIGHT MARKET UP
COALspot.com – “The market finally moved up with firmness in all sectors with some positive signs of markets recovering”, said Cap ...
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- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
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