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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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Monday, 05 October 09
SOUTH AFRICAN COAL RISES ON INDIAN BUYING, DOMESTIC DEMAND
Bloomberg reported that, Prices for coal shipped from South Africa’s Richards Bay, site of the world’s largest export terminal for the f ...
Monday, 05 October 09
BANPU EYES INCREASE IN COAL OUTPUT
The Nation reported that, Banpu plans to boost its coal output to 23 million tonnes next year once production begins at the East Block of its Indomi ...
Monday, 05 October 09
COAL TRADING C&O TO INVEST $100 M NEXT YEAR
The Jakarta Post reported that, Coal and Oil (C&0) Group of India plans to invest up to US$100 million in Indonesia next year to acquire coal mi ...
Sunday, 04 October 09
INDONESIAN COAL EXCHANGE FOR PRICE BENCHMARKING IN OFFING
Reuters cited Mr Bob Kamandanu chairman of the Indonesian Coal Producers Association as saying that Indonesia plans to set up a coal exchange to cre ...
Sunday, 04 October 09
GRASIM TO CONSOLIDATE CEMENT BIZ
The Statesman reported that, India's largest cement producer Aditya Birla group today said it would consolidate its cement businesses by merging Gr ...
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- VISA Power Limited - India
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- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
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- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
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- Planning Commission, India
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- Videocon Industries ltd - India
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- Indika Energy - Indonesia
- Australian Coal Association
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- Africa Commodities Group - South Africa
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- Energy Link Ltd, New Zealand
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- Electricity Authority, New Zealand
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- Indian Oil Corporation Limited
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- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
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- The University of Queensland
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- SMC Global Power, Philippines
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- Aboitiz Power Corporation - Philippines
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- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
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- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
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- Electricity Generating Authority of Thailand
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- Ambuja Cements Ltd - India
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- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
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- India Bulls Power Limited - India
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- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
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- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
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- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
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- Bulk Trading Sa - Switzerland
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- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
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- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
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- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
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- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
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- Goldman Sachs - Singapore
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