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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, 21 October 10
WORLDS FIRST, SINGAPORE EXCHANGE TO CLEAR OTC INDONESIAN COAL SWAP - MONDOVISIONE
Mondovisione reported that, Singapore Exchange (SGX) will be the first exchange in the world to clear over-the-counter (OTC) Indonesian Sub-Bitumino ...
Thursday, 21 October 10
MEC WOOS INDIAN POWER FIRMS FOR 50% STAKE SALE - BUSINESS STANDARD
Business-Standard reported that, Singapore-based MEC Coal plans to rope in an Indian power company as a 50 per cent equity partner. It is believed t ...
Thursday, 21 October 10
CAPESIZE, A FANTASTIC WEEK WITH IMPROVED RATES IN BOTH BASINS - FEARNBULK
Handy Activity remains slow this week combined with a lack of fresh enquiry in the Atlantic. Indexes are all negative except Cape but it is worth no ...
Wednesday, 20 October 10
BLENDING OF IMPORTED COAL AT THERMAL PLANT UP TO 30 % MAY BE ALLOWED - PUNJAB NEWS LINE
Punjab News Line reported that, Indian government is considering allowing increase in the blending ratio of imported coal from 10 to 30 percent at t ...
Wednesday, 20 October 10
CANADIAN CHALLENGER ACQUIRES INDONESIAN COAL PROJECT
COALspot.com (Press Release): According to Challenger Deep Resources Corp's website and press release posted on the site, Challenger Deep Res ...
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- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- MS Steel International - UAE
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Australian Coal Association
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- The University of Queensland
- White Energy Company Limited
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
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