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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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Monday, 08 November 10
INDONESIAN HBA HAS INCREASED TO $ 95.51 PER TON FOR NOVEMBER LOADING
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Sunday, 07 November 10
THE SUPRAMAX INDEX IN THE FAR EAST CONTINUED TO BE UNDER PRESSURE - CAPT. REDDY
COALspot.com: The freight market continued to remain soft and all segments were down by almost about 6 pct.
The BDI and Cape Size index was down ...
Saturday, 06 November 10
DRY BULK MARKET LACKING SUPPORT TO SUSTAIN CURRENT LEVELS, BUT PANAMAX OWNERS ARE MORE FORTUNATE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Posting its fifth straight losing session, the dry bulk market benchmark, the BDI (Baltic Dry Index) was down yesterday by another 1.26% to 2510 poi ...
Friday, 05 November 10
RI COAL EXPORT PROSPECTS STILL BRIGHT - THE JAKARTA POST
The Jakarta Post reported that, Indonesia, already the world’s largest exporter of seaborne thermal coal since 2005, will continue to be a maj ...
Thursday, 04 November 10
CAPE SIZE SENTIMENT FOR THIS WEEK WAS NEGATIVE - FEARNBULK
Handy
The Atlantic markets remain flat and lackluster. High volume of tonnage availabi ...
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- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- White Energy Company Limited
- PTC India Limited - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- VISA Power Limited - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
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