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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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Wednesday, 22 December 10
PEABODY ENERGY TO SOURCE INDONESIAN COAL FROM PT SUPRA BARA ENERGI (SBE) - COAL GEOLOGY
Coal Geology reported that, Peabody Energy has entered into an agreement to source coal from PT Supra Bara Energi (SBE), which will be sold on the e ...
Wednesday, 22 December 10
INDONESIAN COAL LOAD PORT WEATHER CONDITION AND DELAYS
COALspot.com - The several leading shipping agents in Indonesia, said due to rainy season in Indonesia, loading activities in coal loading ports hav ...
Wednesday, 22 December 10
COAL INDIA CLOSE TO BUYING 15% STAKE IN AUSTRALIAN MINE - ECONOMIC TIMES
Economic Times reported that, Coal India (CIL) is close to buying a stake between 10% to 15% in an Australian mine owned by Peabody, a US company.
...
Wednesday, 22 December 10
CAPESIZE FUTURES MARKET RATES ARE EXPECTED TO CONTINUE THEIR DRIFT DOWN IN 2011 - BRS
Nearly two months of weekly declines in the Baltic Capesize Index were finally halted last week with a small 1% increase Friday-to-Friday. The impro ...
Wednesday, 22 December 10
DRY BULK MARKET LOOKING FOR DIRECTION AMID HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market isn’t exhibiting a “festive” behavior, thus cheering ship owners and investors alike. Instead, the industry&rs ...
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- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Planning Commission, India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
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