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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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Saturday, 20 November 10
ITALIAN STEAM COAL MARKET HAS RECOVERED - ITALIAN COAL ASSOCIATION
Press Release - This year Italy will import 17 million tons of steam coal, up 3% from 2009, and 5.5 million tons of coking coal and PCI, up 37% over ...
Friday, 19 November 10
WE'LL THINK ABOUT COAL TOMORROW - ANALYSIS
The future of coal generation in Russia is in question. The largest energy companies have abandoned their initial plans to switch their therma ...
Friday, 19 November 10
DRY BULK MARKET ON THE ROPES WITH BDI PLUNGING TO 2,164 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the panamax markets suffering the most this week, but a ray of hope for the capesize market, which appears to be stabilizing after days of fall ...
Thursday, 18 November 10
WORLD COAL ASSOCIATION WELCOMES NEW CHAIRMAN & SHENHUA GROUP AS NEW MEMBER 17 NOVEMBER 2010
Press Release – The premier global coal industry association marks its 25th anniversary with a new Chairman and welcomes China’s lar ...
Thursday, 18 November 10
MUNDRA PORT AWARDED BEST PRIVATE PORT - COMMODITY ONLINE / HELLENIC SHIPPING
Adani Group owned, Mundra Port has been awarded the Annual Indian Maritime Gateway Award for the Best Private Port of the Year for the third consecu ...
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- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- PTC India Limited - India
- GMR Energy Limited - India
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
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