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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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Saturday, 20 November 10
ITALIAN STEAM COAL MARKET HAS RECOVERED - ITALIAN COAL ASSOCIATION
Press Release - This year Italy will import 17 million tons of steam coal, up 3% from 2009, and 5.5 million tons of coking coal and PCI, up 37% over ...
Friday, 19 November 10
WE'LL THINK ABOUT COAL TOMORROW - ANALYSIS
The future of coal generation in Russia is in question. The largest energy companies have abandoned their initial plans to switch their therma ...
Friday, 19 November 10
DRY BULK MARKET ON THE ROPES WITH BDI PLUNGING TO 2,164 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the panamax markets suffering the most this week, but a ray of hope for the capesize market, which appears to be stabilizing after days of fall ...
Thursday, 18 November 10
WORLD COAL ASSOCIATION WELCOMES NEW CHAIRMAN & SHENHUA GROUP AS NEW MEMBER 17 NOVEMBER 2010
Press Release – The premier global coal industry association marks its 25th anniversary with a new Chairman and welcomes China’s lar ...
Thursday, 18 November 10
MUNDRA PORT AWARDED BEST PRIVATE PORT - COMMODITY ONLINE / HELLENIC SHIPPING
Adani Group owned, Mundra Port has been awarded the Annual Indian Maritime Gateway Award for the Best Private Port of the Year for the third consecu ...
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- Baramulti Group, Indonesia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- The University of Queensland
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
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