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Saturday, 31 October 09
PRODUCERS BENEFIT FROM COAL'S TIGHT SUPPLY AND STRONG DEMAND
 The Jakarta Post reported that, The outlook for Indonesian coal producers appears promising with strong volume growth coming from both the domestic and export markets.
Despite the delayed completion of the 10,000 megawatts (MW) coal-fired steam power plant (PLTU) program, we expect to see additional electricity capacity starting in the fourth quarter of 2009. PLTU Labuan (2x300 MW) was scheduled to operate its first unit in September 2009 and the second unit by December 2009.
PLTU Rembang (2x315 MW) and Indramayu (2x330 MW) should start to operate by January 2010. As nine out of 10 projects in Java-Bali are now in their construction stages, there should be a total add-on capacity of 6,830 MW by the end of 2010. Six PLTU projects (total capacity162 MW) outside the Java-Bali region have already started the construction stage in the fourth quarter of this year with an additional 5 to follow suit.
The Government of Indonesia has finally approved the coal volume required for the domestic market obligation (DMO) at 75 million tons per year starting from 2010, 10.3 percent higher year-on-year from 68 million tons of domestic consumption estimated for 2009.
The volume set for the DMO would amount to 30 percent of the 2010 total estimate for coal production at 250 million tons or up 8.7 percent year-on-year from the 2009 estimate of 230 million tons (chart 1). PLN itself has signed 20-year coal supply contracts, effective once the PLTUs are operational, amounting to 30m tons per year of low-rank coal.
We foresee that the implementation of the DMO has limited the flexibility for coal producers to aggressively penetrate the export market. On top of that, the government has recently revealed its intention to apply a restriction on export quotas at 150 million tons per year starting from 2010.
The regulations would also require each coal producer to allocate 25 percent of their total coal production for the domestic market, or to face penalties in the form of restrictions on their exports.
We see, however, that this last regulation might not be necessary due to the anticipated increase in the volume of coal production going forward, exceeding the domestic demand requirements.
On a more positive note, the government seems willing to accommodate Indonesian coal producers' wishes for minor interventions in regulating the sales price for coal under the DMO provisions. The sales price will be with reference to the international market price to avoid high spreads between export and domestic pricing.
Based on the Newcastle Index, the year-to-date coal price has averaged US$70.7 per ton. Despite a downward trend since the fourth quarter of 2008, coal prices have been relatively steady throughout 2009.
We believe that the price of coal has found its new equilibrium at current levels, supported by stronger demand for higher energy needs mostly in the South East Asian region. Hence, we now expect the coal price to average US$75/t in 2010.
Government also plans to cut the royalty tax rate (DPHB) on low calorific value coal. The proposed DPHB rate is 9 percent for coal with CV<5,000kcal/kg (vis-*-vis 13.5 percent previously) and 7.5 percent for CV<4,500kcal/kg.
We see that upon implementation, lower royalty rates will mean incentives towards growth expectations in the sector.
Stronger domestic demand starting from 2010 paired with recovery of global demand will provide higher volume support for demand for both thermal and coking coal. In our view India will provide the highest growth in thermal coal demand, boosting imports by about 18% to 40m tons beginning this year, in line with the government's plan to double coal-fired electricity generation capacity by 2017.
Indonesia has also made preparations to start the 10,000 MW program phase II which is scheduled to start in 2012 and to operate by 2014.
We estimate coal-fired power plants will take around 48 percent from the total portion of 9,963 MW. Furthermore, coal supply may not grow at the same pace as demand due to export restrictions set on major coal exporters, such as Vietnam and China to secure their domestic needs.
Supported by the fact that the China government has decided to reduce its export quota by 50 percent from 40 million tons to 20 million tons.
As one of the world's major coal exporters, Indonesia will certainly have the upper hand in the tightening supply of coal.
Source:The Jakarta Post
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Friday, 09 October 09
INDIKA IN TALKS TO SELL 4M TONS OF COAL, EYEING BP ASSETS
The Jakarta Post reported that, Energy company PT Indika Energy is in talks with Indian buyers to sell 4 million tons of coal next year, one of its ...
Friday, 09 October 09
BULK-SHIPPING LINES MUST CANCEL 50% OF NEW ORDERS, PLATOU SAYS
Bloomberg reported that, Bulk-shipping lines need to cancel half of the new vessels they have on order to ease a capacity glut and revive freight ra ...
Friday, 09 October 09
THE BALTIC DRY INDEX WOKE UP: DRY BULK MARKET ON THE RISE
Hellenic Shipping News reported that, In what could prove the beginning of a new and sustainable rally for the dry bulk market, the BDI (Baltic Dry ...
Friday, 09 October 09
STRAITS ASIA INDONESIAN MINE COAL LOADER COLLAPSES
* New coal loading facility collapsed due to heavy rain
* Older coal loading facility seem unaffected so far
* UBS may cut valuation if disruption ...
Thursday, 08 October 09
COAL INDIA SAYS IMPORTS COULD JUMP 10 TIMES IN 3 YRS
Reuters reported that, Coal imports by state explorer Coal India Ltd could jump 10 times to 40-45 million tonnes in three years to meet a sharp rise ...
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- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Eastern Coal Council - USA
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
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