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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, 13 January 11
DRY BULK RATES HIT NEW MULTI-MONTH LOWS ON AUSTRALIAS FLOODS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Floods in Australia’s Queensland has seriously disrupted coal shipments and together with a flood of vessels has pushed freight rates for dry ...
Wednesday, 12 January 11
BULKER DELIVERIES WEIGHING IN ON FREIGHT RATES KEEPING SENTIMENT ON A NEGATIVE MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of new buildings still hitting the water has caught up for good with the freight market, with capesizes unable to weather the storm. With r ...
Tuesday, 11 January 11
SUPRAMAX TRIP VIA INDONESIA TO INDIA US$ 8,000 PER DAY
Despite continued growth in the bulk trades, the delivery of new vessels is beginning to take its toll. The BDI continued its decline, finishing las ...
Tuesday, 11 January 11
DRY BULK MARKET REACHES NEW LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark index, the Baltic Dry Index (BDI) lost further ground in the beginning of the week, following the trend of the ...
Monday, 10 January 11
MINING INVESTMENT TARGET TOO LOW - TEMPO INTERACTIVE
TEMPO Interactive reported that, the Indonesian Mining Association’s executive director, Priyo Pribadi, believes the government’s invest ...
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- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- The University of Queensland
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Australian Coal Association
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Parliament of New Zealand
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
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