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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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Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
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- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- White Energy Company Limited
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- PTC India Limited - India
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- The University of Queensland
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
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