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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, 04 November 10
GVK TALKS WITH MEC FOR INDONESIAN MINES DEAL - DNA INDIA
As reported by DNA India, GVK Power and Infrastructure on Wednesday said it is in talks with Gulf-based MEC Coal to buy its coal mines in Indonesia, ...
Wednesday, 03 November 10
PANAMAX SIZE DRY-BULK CARRIER MARKET IS STRONG - GERSON LEHRMAN
Panamax class vessels have been part of the fluctuation of the broader current dry bulk market. They have experienced occasional steep movements, du ...
Tuesday, 02 November 10
ADDED VALUE REMAINS STAGNANT - MAJALAH TAMBANG
The improvement of added value of mining products in accordance with mandate of the mining law has not been visible. Minerals and coal are still exp ...
Saturday, 30 October 10
THE SUPRAMAX FREIGHT MARKET THIS WEEK REMAINED ALMOST AT LAST WEEK LEVELS - VISTAAR SINGAPORE
COALspot.com: The freight market this week remained almost at same levels except for Panamax index which was up by 191 points.
The feast/SE Asia ...
Friday, 29 October 10
CAPE MARKET STARTED TO BREAK THOUGH THE UPWARDS RESISTANCE LEVEL OF USD 40K DAILY FOR SPOT CARGOS - FEARNLEYS
HANDY
The Atlantic markets remain flat and lackluster. The expectations that the grain ...
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- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Planning Commission, India
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
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