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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, 09 September 10
DRY BULK MARKET IS LOOKING TO INCREASE GAINS ON OCTOBER IRON ORE CONTRACTS
The “success” story that the dry bulk market has been displaying during the past couple of weeks is being materialized as we head toward ...
Tuesday, 07 September 10
INDIA IMPORTS 1.63 MLN T OF COAL FOR THE PERIOD 30 AUGUST - 5 SEPTEMBER - SOURCES
COALspot.com: India has imported 1.07 million tons of power plant coal, 0.520 mln tons of coking coal and around 41,000 mt of Anthracite coal for th ...
Tuesday, 07 September 10
GOVERNMENT DECLARED INDONESIAN COAL PRICE REFERENCE DECLINE FOR THIRD-STRAIGHT MONTH
COALspot.com: Indonesian thermal coal price reference, a monthly benchmark price declared by Ministry of Energy and mineral resources of Repub ...
Tuesday, 07 September 10
MERCATOR TO BUY COAL MINE IN INDONESIA THIS FISCAL
Mercator Lines, India’s second-largest shipping company which has diversified into coal mining, will buy a coal mine in Indonesia with more th ...
Monday, 06 September 10
DRY BULK MARKET GAINS 6.05% ON WEEK, BOOSTED BY CAPESIZE VESSELS
The dry bulk market is looking to capitalize last week’s gains of more than 6 percent in this week, as the capesize segment seems to be on a h ...
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- Posco Energy - South Korea
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Australian Coal Association
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- The University of Queensland
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
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