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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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Sunday, 23 January 11
THE AVERAGE CHARTER RATE FOR CAPE SIZE VESSELS WAS AT $ 8,859 PD ALMOST CLOSE TO 2008 LOWS - VISTAAR
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1,370 points. “ In May 2010 the BDI touched ...
Saturday, 22 January 11
POSSIBLE COAL EXPORT RESTRICTIONS ON INDONESIA UNLIKELY TO AFFECT CHURCHILL MINING - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining moved to reassure investors after a fall in its share price, stating that from talks with the au ...
Thursday, 20 January 11
INDONESIA MAY BAN LOW-QUALITY COAL EXPORTS FROM 2014 - BLOOMBERG
Bloomberg reported that, The Indonesian government plans to ban exports of coal with an energy value of less than 5,600 kilocalories a kilogram star ...
Thursday, 20 January 11
SUPRAS ARE DOING USD 7- 8K FOR INDONESIA-INDIA - FEARNBULK
Handy
Negative sentiment for forward positions in the Atlantic market due to lack of cargo availability and too many ballasters from the East. Con ...
Thursday, 20 January 11
ITMG TARGETS TO PRODUCE 25 MILLION TONS OF COAL THIS YEAR - BISNIS INDONESIA
Bisnis Indonesia reported that, Coal producer PT Indo Tambangraya Megah Tbk (ITMG) targets to produce 25 million tons of coal this year, a 13. ...
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- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- MS Steel International - UAE
- Minerals Council of Australia
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Parliament of New Zealand
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
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