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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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Monday, 08 November 10
INDONESIAN HBA HAS INCREASED TO $ 95.51 PER TON FOR NOVEMBER LOADING
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Sunday, 07 November 10
THE SUPRAMAX INDEX IN THE FAR EAST CONTINUED TO BE UNDER PRESSURE - CAPT. REDDY
COALspot.com: The freight market continued to remain soft and all segments were down by almost about 6 pct.
The BDI and Cape Size index was down ...
Saturday, 06 November 10
DRY BULK MARKET LACKING SUPPORT TO SUSTAIN CURRENT LEVELS, BUT PANAMAX OWNERS ARE MORE FORTUNATE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Posting its fifth straight losing session, the dry bulk market benchmark, the BDI (Baltic Dry Index) was down yesterday by another 1.26% to 2510 poi ...
Friday, 05 November 10
RI COAL EXPORT PROSPECTS STILL BRIGHT - THE JAKARTA POST
The Jakarta Post reported that, Indonesia, already the world’s largest exporter of seaborne thermal coal since 2005, will continue to be a maj ...
Thursday, 04 November 10
CAPE SIZE SENTIMENT FOR THIS WEEK WAS NEGATIVE - FEARNBULK
Handy
The Atlantic markets remain flat and lackluster. High volume of tonnage availabi ...
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- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Electricity Authority, New Zealand
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- White Energy Company Limited
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
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