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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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Tuesday, 26 October 10
DRY BULK MARKET TO KEEP RISING THIS WEEK ON STRONG CHINESE IRON ORE AND THERMAL COAL DEMAND - HELLENIC SHIPPING
Overcapacitated or not, the dry bulk market keeps its positive momentum as we move forward this week, with the Baltic Dry Index (BDI) rising by 0.77 ...
Monday, 25 October 10
TWO CHINESE COMPANIES INK DEAL TO TAP AUSSIE COAL RESERVES
China Daily reportd that, two Chinese coal firms have teamed up to explore and develop coal resources in an area in Australia that has forecast rese ...
Monday, 25 October 10
DRY BULK MARKET STILL HEAVILY DEPENDENT ON CHINA, POSTS SMALL WEEKLY LOSS OF 1.27% - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With every twitch and turn from China’s metals industry, the dry bulk market is disproportionally affected, as evidenced by the course of the ...
Sunday, 24 October 10
SUPRAMAX VESSELS BEING FIXED AROUND $ 15 K PER DAY DELIVERY N. CHINA FOR TRIP VIA INDONESIA TO INDIA - VISTAAR SHIPPING
COALspot.com: The freight market this week remained almost at same levels with not much change. However the Far East/SE Asia market was quite soft w ...
Saturday, 23 October 10
HEAVY RAINS NO DAMPENER FOR 2010 COAL OUTPUT TARGET, MINISTRY SAYS - THE JAKARTA GLOBE
The Jakarta Globe reported that, National coal production would likely meet the target set by the Energy Ministry despite unusually heavy rain this ...
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- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- The University of Queensland
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- VISA Power Limited - India
- Australian Coal Association
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
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