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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, 04 November 10
GVK TALKS WITH MEC FOR INDONESIAN MINES DEAL - DNA INDIA
As reported by DNA India, GVK Power and Infrastructure on Wednesday said it is in talks with Gulf-based MEC Coal to buy its coal mines in Indonesia, ...
Wednesday, 03 November 10
PANAMAX SIZE DRY-BULK CARRIER MARKET IS STRONG - GERSON LEHRMAN
Panamax class vessels have been part of the fluctuation of the broader current dry bulk market. They have experienced occasional steep movements, du ...
Tuesday, 02 November 10
ADDED VALUE REMAINS STAGNANT - MAJALAH TAMBANG
The improvement of added value of mining products in accordance with mandate of the mining law has not been visible. Minerals and coal are still exp ...
Saturday, 30 October 10
THE SUPRAMAX FREIGHT MARKET THIS WEEK REMAINED ALMOST AT LAST WEEK LEVELS - VISTAAR SINGAPORE
COALspot.com: The freight market this week remained almost at same levels except for Panamax index which was up by 191 points.
The feast/SE Asia ...
Friday, 29 October 10
CAPE MARKET STARTED TO BREAK THOUGH THE UPWARDS RESISTANCE LEVEL OF USD 40K DAILY FOR SPOT CARGOS - FEARNLEYS
HANDY
The Atlantic markets remain flat and lackluster. The expectations that the grain ...
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- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- The University of Queensland
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
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