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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, 25 November 10
JSW ENERGY BUYS CANADIAN COAL FIRM FOR $411 MN - NDTV PROFIT
NDTV Profit reported that, Sajjan Jindal-owned JSW Energy on Wednesday said it has entered into an agreement to buy out British Virgin Islands-based ...
Thursday, 25 November 10
DRY BULK MARKET STILL GOING STRONG THIS WEEK, CAPESIZE SECTOR LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum yesterday, with the industry’s benchmark, the Baltic Dry Index (BDI) gaining a further 0.64% to e ...
Wednesday, 24 November 10
COAL PRODUCTION PREDICTED TO CLIMB IN SUNNIER 2011 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal producers are expected to increase output by 13 percent in 2011, thanks to predicted better ...
Monday, 22 November 10
RUSSIA'S KTK HAS PRODUCED 4.59 MLN TONNES OF COAL IN FIRST 9 MONTHS OR AN INCREASE OF 5% YEAR-ON-YEAR
COALspot.com (Press Release) - KTK has produced 4.59 mln tonnes of coal in first nine months or an increase of 5% year-on-year.
Kuzbasskaya Topli ...
Sunday, 21 November 10
THE FREIGHT MARKET MAY SLIGHTLY FIRM UP NEXT WEEK - CAPT. REDDY
COALspot.com: The freight market continued its down fall with BDI down by 6.83 pct and closed at 2,155 points.
According to Vistaar Shipping of S ...
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- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Planning Commission, India
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
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