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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, 31 December 10
STC TO FINALIZE 12 MILLION MT OF COAL IMPORT CONTRACT TO TWO INDIAN AND A DUBAI BASED COAL TRADER - SOURCES
COALspot.com - World's single largest coal import tender floated by STC on behalf of state utility NTPC to finalize its suppliers or already finali ...
Thursday, 30 December 10
DRY BULK MARKET STAYS SUBDUED AT THE END OF 2010 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dy bulk market failed to cheer ship owners across the board as the year draws to an end, thus bringing mixed feelings ahead of 2011. On one hand ...
Thursday, 30 December 10
KANGAROO RESOURCES BUYS INDONESIAN COAL COMPANY
Australian-listed Kangaroo Resources Ltd. said Wednesday it will buy 99% of the Pakar thermal coal project in East Kalimantan, for A$277 million thr ...
Wednesday, 29 December 10
WEATHER IMPACTS RIO TINTO COAL AUSTRALIAS QUEENSLAND OPERATIONS
Press Release - As a result of severe monsoonal rain in central and northern Queensland, force majeure has been declared on coal sales contracts fro ...
Monday, 27 December 10
ANALYSIS: CHINA'S COAL PRODUCTION MISMATCHED WITH DOMESTIC DEMAND
As reported by iStock Analyst, China's coal market has been trapped in a strange cycle. Large coal production bases are facing overcapacity, while ...
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- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- MS Steel International - UAE
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
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