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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, 20 January 11
DRY BULK MARKETS FALL SEES NO END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Pundits indicating that the dry bulk market’s sentiment remains weak were justified, as the industry’s benchmark, the Baltic Dry Index ( ...
Wednesday, 19 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Tuesday, 18 January 11
MINISTRY SEEKS COAL FROM INDONESIA - SUNDAY OBSERVER
Sunday Observer reported that, Ministry of Power and Energy is to explore the possibilities of importing quality coal from Indonesia.
Minister Pa ...
Tuesday, 18 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Sunday, 16 January 11
STANCHART GLOBAL RESEARCH SEES COAL PRICE RISING ON SUPPLY DISRUPTION - BURSA MALAYSIA MARKET NEWS
Bursa Malaysia Market News reported that, Standard Chartered Global Research has upgraded its 2011 forecasts for global thermal coal prices based on ...
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- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Central Electricity Authority - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Planning Commission, India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- The University of Queensland
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
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