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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, 30 September 10
DRY BULK MARKET HEADS SOUTH ONCE MORE WITH MARKET SENTIMENT TAKING A CAUTIOUS APPROACH - HELLENIC SHIPPING
The dry bulk market didn’t manage to maintain the slightly upward momentum it had established during the first two session of the week, with t ...
Wednesday, 29 September 10
MOZAMBIQUE: COAL IN THREE MORE TETE DISTRICTS
All africa reported that, Coal deposits have been confirmed in the districts of Changara, Cahora Bassa and Magoe, in the western Mozambican province ...
Tuesday, 28 September 10
MMTC TO AWARD CONTRACT TO CEPL AND KNOWLEDGE TO SUPPLY 0.835 MILLION TONS OF IMPORTED COAL
COALspot.com: MMTC, India’s state owned trading company has opened three coal purchase tenders today.
According to our market sources, Coas ...
Monday, 27 September 10
DRY BULK: FREIGHT RATES CONTINUE TO FALL ON LOW ACTIVITY - HELLENIC SHIPPING
The dry bulk market didn’t manage to change its fortunes during the past week, with holidays across many Asian countries, predominantly China, ...
Saturday, 25 September 10
INDONESIA HAS EXPORTED 187.656 MILLION TONNES OF COAL IN EIGHT MONTHS
COALspot.com: Indonesia, the world largest coal exporter has exported 187.656 million tons of coal for the period January – August this ...
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- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Planning Commission, India
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Australian Coal Association
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- The University of Queensland
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
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