Rekomendasi Beberapa Sekuritas, 21 Januari 2011

Berikut rekomendasi dari empat sekuritas ternama untuk Jumat, 21 Januari 2011.

1. E-Trading Securities

Pada perdagangan kemarin, IHSG masih ditutup melemah 80 poin (-2,27%)
ke level 3.454,12, karena kekhawatiran lonjakan harga pangan, pembatasan BBM, dan kebijakan moneter yang dinilai terlalu lambat ditanggapi oleh pemerintah. Ini membuat berita positif dari regional tidak mampu mengangkat indeks.

Sektor paling banyak menurun adalah pertambangan dan agriculture. Asing melakukan net selling Rp 35 milliar dengan saham yang banyak dilepas tambang batubara dan semen. Secara teknikal indeks masih berada di fase konsolidasi dengan menguji level support kuatnya di 3.483. Hari ini indeks akan bergerak di kisaran 3.433-3.569 dengan saham-saham pilihan BMRI, ASII dan ITMG.

2. Sucorinvest Central Gani

Kemarin, IHSG melemah dan sempat menyentuh level 3.441,63 sebelum ditutup anjlok 80,17 poin di 3.454,12. Hampir seluruh sektor melemah, terutama komoditas, industri dasar, barang konsumsi, manufaktur di tengah-tengah penurunan indeks bursa global, penurunan harga komoditas, kekhawatiran pemulihan ekonomi Amerika Serikat, kekhawatiran kenaikan suku bunga di Tiongkok dan Indonesia. Indeks hari ini diperkirakan melemah pada kisaran 3.406-3.501.

3. Erdhika Sekuritas

Seluruh sektor melemah kemarin, khususnya sektor pertambangan dan perkebunan masing-masing -3,8% dan -3,2%. Indeks hari ini akan berada pada kisaran 3.419-3.512.   Buy on weakness ITMG dan ANTM.

4. Reliance Securities 

Indeks saham di Asia kemarin ditutup pada teritori negatif. Soalnya, pertumbuhan ekonomi Tiongkok pada 2010 masih double digit, sehingga memicu Pemerintah Tiongkok mengetatkan kebijakan moneter. IHSG hari ini masih akan melanjutkan tren penurunan dan bergerak di kisaran 3.417–3.475 dengan saham pilihan ADRO, AALI, SMCB, BBRI, dan INCO.

Rekomendasi HD Capital, 21 Januari 2011

Berikut rekomendasi dari HD Capital untuk perdagangan saham Jumat, 21 Januari 2011. HD Capital merekomendasikan opsi beli terhadap saham Bank Mandiri (BMRI), Indo Tambang Megaraya (ITMG), Adaro Energy (ADRO), dan Bank Rakyat Indonesia (BBRI).

BUY: (BMRI, ITMG, ADRO, BBRI)

• Koreksi dalam di IHSG membuat beberapa saham big cap menarik untuk akumulasi.
   
• Kelihatannya beberapa saham berkapitalisasi besar terutama perbankan dan batubara dapat beranjak naik dari keadaan oversold (jenuh jual)
   
• IHSG close (20-01) 3.451.020(-81.280/-2.35%) (Val.Rp.4.7T)

• Support: 3.420-3.320, Resistance: 3.550-3.590-3.650

 

Stock picks:

1.    Bank Mandiri (BMRI): (BUY) (Target: Rp 6.000) (close 20/01 Rp 5.750)

• Saham ini menyimpan potensi technical rebound karena bersifat counter-siklus dan turun jauh lebih dalam dari IHSG.
   
• Technically signal beli dari stochastic di confirm oleh keadaan oversold dan slope ADX yang menurun
   
• Pasca rights issue tersedianya dana tambahan buat expansi penyaluran kredit yang dapat mendongkrak proyeksi laba kedepan.

• Entry: (1) Rp 5.750, Entry (2) Rp 5.600, Cut loss point: Rp 5.400

 

2.   Indo Tambang Raya (ITMG) (BUY): (Target: Rp 51.600) (Close 20/01 Rp 48.950)

• Peraturan pembatasan pemerintah terhadap export low calorie batubara di bawah 5600 ka tidak akan mempengaruhi ITMG karena lebih bermain di high calorie coal.
   
• Keadaan yang cukup jenuh jual (oversold) pasca koreksi kemarin juga membuat scenario technical rebound dapat terjadi
   
• Entry (1) Rp 48.700, Entry (2) Rp 47.500, Cut loss point: Rp 46.300

 

3.   Adaro Energy (ADRO) (BUY): (Target: Rp 2.625) (Close 20/01 Rp 2.475)

• Spesialisi bermain di medium-high end calorie coal membuatnya tidak akan berpengaruh terhadap larangan pemerintah terhadap export low calorie coal
   
• Secara technical dapat terjadi percobaan untuk memasuki daerah diatas 50-ma (2.500) guna resume uptrend kembali 
   
• Entry: (1) Rp 2.450, Entry (2) 2.350, Cut loss point: Rp 2.250

 

4.   Bank BRI (BBRI) (BUY) (Target: Rp 4.800) (close 20/01 Rp 4.800)

• Valuasi 2011F PER/PBV (11.2x/2.7x) yang cukup murah dan profitabilitas tinggi (ROE 27% & NPM 21%) menjadikan ini kandidat untuk rebound dari keadaan jenuh jual (oversold).

• Entry: (1) Rp 4.750, Entry (2) Rp 4.650, Cut-loss point: Rp 4.500

 

Dibuat oleh:

Yuganur Wijanarko

Senior Research HD Capital (Yuganur@hdx.co.id)

Indonesia says sees m/m inflation for January around 0.5 pct

Indonesia's statistic agency said on Thursday it expects inflation in January will be around 0.5 percent m/m and core inflation will be around 4 percent y/y. Source: Reuters

Indonesia may require coal firms to upgrade quality for exports

The Indonesian government plans to issue a decree which will require producers of low quality coal to upgrade quality to a minimum of 5,600 kcal/kg air-dried-basis (adb) before export, a senior official said on Thursday.

The regulation is expected to be issued in February, said Witoro Soelarno, the official at the energy ministry. Source: Reuters

Listrik to Ask Bukit, Indika, Adaro to Cut Coal Price

PT Perusahaan Listrik Negara, Indonesia’s state utility company, will ask seven coal suppliers including PT Tambang Batubara Bukit Asam and PT Adaro Energy to reduce prices of the fuel for this year, Listrik Negara Primary Energy Director Nur Pamudji said.

Listrik Negara will meet its suppliers next week, and expects to agree on a lower price by end of the month, Pamudji said in a telephone interview from Jakarta today. Other companies that supply coal to Listrik Negara are PT Berau Coal, PT Kideco Jaya Agung, a unit of PT Indika Energy, and PT Kaltim Prima Coal, a unit of PT Bumi Resources, he said. 

“We want to use the average benchmark price in the fourth quarter as a base to set this year’s coal price, while they want to use the January price,” Pamudji said. 

The reference coal prices in the fourth quarter averaged $97.2 a metric ton, while January price was set at $112.4 a ton, according to data compiled by Bloomberg News. Source: Reuters

Rekomendasi HD Capital, 20 Januari 2011

HD Capital merekomendasikan opsi beli untuk saham Bank Mandiri (BMRI), Bank Central Asia (BBCA), Semen Gresik (SMGR), dan Bank BJB (BJBR).

BUY: (BMRI, BBCA, SMGR, BJBR)

• IHSG masih berada dalam kisaran sempit (trading range) untuk proses menghentikan penurunan lebih dalam lagi.
   
• Kelihatannya beberapa saham berkapitalisasi besar terutama perbankan mulai menunjukan potensi reversal dari keadaan sideways tren
   
• IHSG close (19-01) 3.524.700(-21.280/-0.45%) (Val.Rp.2.7T)

• Support: 3.510-3.450, Resistance: 3.590-3.650-3.720

 

Stock picks:

1.    Bank Mandiri (BMRI): (BUY) (Target: Rp 6.000) (close 18/01 Rp 5.700)

• Skenario rights issue sudah keluar serta potensi dilusi sudah dicerna sepenuhnya oleh pasar dalam penurunan sebelumnya
   
• Sekarang tinggal melihat efek positif dari rights yaitu tersedianya dana tambahan buat ekspansi penyaluran kredit yang dapat mendongkrak proyeksi laba kedepan.

   

2.   Bank BCA (BBCA) (BUY): (Target: Rp 6.000) (Close 19/01 Rp 5.700)

• Ketakutan pasar akibat kompetisi dari bank asing dan BUMN lainnya dalam bisnis penyaluran kredit dan deposit sudah cukup tecermin dalam koreksi tajam sebelumnya yang membuat valuasi 2011 PER BBCA 16x dari sebelumnya 20'an beberapa minggu lalu.
   
• Keadaan yang cukup jenuh jual (oversold) pasca koreksi kemarin juga membuat scenario technical rebound dapat terjadi
   
• Entry (1) Rp 5.700, Entry (2) Rp 5.500, Cut loss point: Rp 5.300

 

3.   Semen Gresik (SMGR) (BUY): (Target: Rp 8.750) (Close 19/01 Rp 8.400)

• Koreksi berlebihan akibat penurunan proyeksi laba 2011 sebesar 5% terlihat berlebihan, seharusnya investor rmelihat bahwa beberapa katalis positif seperti ekspansi 30% di 2012, pajak yang lebih murah ke pemerintah (5%) serta potensi menaikan harga jual semen lagi di Q1 2011 dapat menarik akumulasi untuk teknikal rebound.
   
• Entry: (1) Rp 8.350, Entry (2) 8.150, Cut loss point: Rp 7.850

 

4.   Bank Jawa Barat (BJBR) (BUY) (Target: Rp 1.350) (close 19/01 Rp 1.190)

• Rencana placement saham sebesar 5% ke Jamsostek dapat mendongkrak harga karena terakhir kali dilakukan placement ke pihak luar di Malaysia terjadi di atas harga Rp 1.500 sehingga pasar berspekulasi penjualan dilakukan di atas harga pasar saat ini

• Entry: (1) Rp 1.180, Entry (2) Rp 1.160, Cut-loss point: Rp 1.120

 

 

Dibuat oleh: 

Yuganur Wijanarko

Senior Research HD Capital (Yuganur@hdx.co.id)

Bumi Resources sees 2011 revenue at $5.1 bln

PT Bumi Resources , Asia's largest thermal coal exporter, sees 2011 full year revenue at about $5.1 billion as its selling price is expected to rise at least 10 percent from 2010, said Bumi director Dileep Srivastava on Wednesday.

Srivastava told Reuters the company expect to produce 67 million tonnes this year and sell 66 million tonnes, up from 60 to 61 million in 2010.

"Our average sale price is expected to reach at least $77 per tonne this year," said Srivastava, adding that it is higher than last year's average selling price of $70 per tonne. Source: Reuters

SK Telecom, KDDI bidding for Indonesia's First Media-sources

* SK Telecom, KDDI keen to expand overseas

* First Media being sold for $400-$500 mln-sources

* SK Telecom says interested in First Media

* KDDI declines to comment; keen on M&A 

SK Telecom Co and KDDI Corp are bidding for Indonesian cable TV and internet firm First Media which its parent Lippo Group is trying to sell for $400-$500 million, sources said. 

The South Korean and Japanese telecom companies have been looking for opportunities to invest overseas to offset saturated domestic markets and growing competition at home. 

KDDI, which lags industry leader NTT DoCoMo by a wide margin and has seen tough competition from smaller rival Softbank Corp , told Reuters last month it was in talks with several Asian internet service and content firms about mergers and acquisitions. 

"SK Telecom and KDDI have submitted bids along with local telcos," said one of the sources with knowledge of the deal. The sources declined to be named because the deal is not public. 

A KDDI spokesman in Tokyo declined to comment. Merrill and Deutsche also declined to comment. 

Indonesian conglomerate Lippo Group had hired Bank of America's Merrill Lynch to advise on the sale of First Media, sources had earlier said. Deutsche Bank is advising SK Telecom, sources said. 

First Media, which has a market value of about $230 million, competes against Indovision, a unit of  Indonesian media company Global Mediacom in pay TV  business. The company also runs broadband internet services  which compete with PT Telekomunikasi Indonesia   and Indosat .    First Media declined to comment. 

Lippo -- which owns property, healthcare, media and retail  assets in Indonesia, Hong Kong and Singapore -- has been restructuring its portfolio through either stake sales or outright sales. 

For an earlier story on Lippo, click    SK Telecom said it is interested in First Media, but had not made any decision. It declined to comment on the bid.     "We are looking at various (investment) opportunities overseas, and it (First Media) is just one of the options under consideration," a company official said.     SK Telecom, which controls around 50 percent of the South Korean telecom market, is seeking to expand overseas to generate new revenue streams. 

"I expect SK Telecom to continue to invest overseas, but more focus on emerging markets rather than advanced countries, and to make small-scale investments," said Jonathan Park, an analyst at Hanhwa Securities in Seoul. 

The carrier said in May last year it would invest $100 million to acquire an about 25 percent stake in Malaysian wireless broadband firm Packet One Networks, a unit of Green Packet Bhd. Source: Reuters

Indonesia says Mitsubishi wants to build coal gasification plant

Japan's Mitsubishi Heavy Industries Ltd's is interested in building a coal gasification plant on Indonesia's Sumatra island, and could start construction by the end of 2012, an Indonesian official said on Wednesday.

"The output from the plant is expected to replace gas which is supplied by Conoco Phillips to Chevron operations in Sumatra," said Evita Legowo, director general of oil and gas at the energy and mineral resources ministry.

She told reporters she expects a deal with Mitsubishi will be reached this year, and the coal-to-gas plant could be operational within 2-3 years of construction starting.

The South Africa petrochemical group Sasol said on Tuesday it would not continue with a planned coal-to-liquids plant project in Indonesia as it was more focused on gas-to-liquid opportunities.

Chevron, the U.S. oil major is the biggest producer of crude oil in Indonesia.
Indonesia hopes to produce 970,000 barrels per day (bpd) of oil and condensate in 2011. Source: Reuters

Japan's Kyushu Electric to buy LNG from Indonesia

Japan's Kyushu Electric Power Co (9508.T) said on Wednesday it has agreed with PT Donggi-Senoro LNG of Indonesia to buy 300,000 tonnes of liquefied natural gas annually for 13 years, starting in the second half of 2014.

Donggi-Senoro LNG, a joint venture between Indonesian state energy firm Pertamina, together with Indonesia's PT Medco Energi International (MEDC.JK) and Japan's Mitsubishi Corp (8058.T), plans to produce LNG at a plant in Sulawesi with a capacity of 2 million tonnes per year. Source: Reuters

Permata Jual 31% Saham Asuransi Permata Nipponkoa Indonesia

PT Bank Permata Tbk (BNLI) menjual 31% saham PT Asuransi Permata Nipponkoa Indonesia (APNI) kepada Nipponkoa Insurance Company Limited. Penjualan ini mengakibatkan kepemilikan Permata berkurang dari 51% menjadi tinggal 20%.

Wakil Direktur Utama Permata Herwidayatmo menuturkan, transaksi jual beli saham perusahaan asuransi tersebut telah dilakukan pada 17 Januari 2011 di hadapan Notaris Kun Hidayat.

Berdasarkan laporan keuangan Permata pada kuartal III-2010, aset Asuransi Permata Nipponkoa Indonesia adalah sebesar Rp 213,54 miliar dari tahun 2009 sebesar Rp 203,46 miliar.

Bhakti Investama Kembali Jual 9 Juta Saham CMNP

Bhakti Investama (BHIT) kembali menjual saham Citra Marga Nusaphala Persada (CMNP) yang dimilikinya. Kali ini BHIT menjual 9 juta saham CMNP di harga Rp 1.250/saham pada 14 Januari 2011.

Demikian disampaikan Direktur BHIT Darma Putra kepada Bursa Efek Indonesia, hari ini. Pasca-penjualan tersebut, BHIT masih memiliki 3,15% saham CMNP.

Selama kuartal IV-2010, BHIT juga secara terus-menerus menjual saham CMNP. Penjualan ini dipastikan akan memperbesar perolehan laba perusahaan miliki Harry Tanoesoedibjo itu.

Berikut detail rincian transaksi penjualan saham CMNP oleh BHIT.

25 Oktober 2010    1.481.500         Rp 1.350       Hasil: Rp 2.000.025.000

19 Oktober 2010    11.000.000       Rp 1.270       Hasil: Rp 13.970.000.000

5 November 2010   1.343.000        Rp 1.490       Hasil: Rp 2.001.070.000

23 November 2010 1.500.000        Rp 1.460       Hasil: Rp 2.190.000.000

27 Desember 2010  243.176.000    Rp 2.100       Hasil: Rp 510.669.600.000

                                                                    Total: Rp 530.830.695.000

Dengan demikian, dari hasil divestasi saham CMNP sejauh ini, BHIT telah mengantungi pendapatan Rp 530,83 miliar.

Japan thermal coal contract may reach $145/T in 2011- Macquarie

Major Japanese utilities may be forced to pay nearly 50 percent more than a year ago for their largest annual thermal coal contracts as floods in Queensland push prices higher, according to an analyst report released Tuesday.

The price for the key Japanese fiscal year thermal coal contract could settle at $145 per tonne, up from $98 per tonne for the same contract last year, Macquarie Research said in the report.

A $145 per tonne price would be well over the record seen in 2008, when prices spiked due to flooding in Queensland and the annual contract settled at $125 per tonne.

"The supply disruptions are severe ... by the end of February, we think spot pricing will be quite a bit higher and that's when contracts will be negotiated," Hayden Atkins, an analyst with Macquarie Research said.

Contracts generally settle around spot price levels, often with some premium built in for supply security.

The Japanese thermal coal contract, which runs from April 1 through March 31 of the following year, is a benchmark for other coal deals and is typically negotiated between Xstrata and large Japanese utilities including Tokyo Electric Power Co (TEPCO), Tohoku Electric Power Co Inc , and Chubu Electric .

Supply issues are not limited to Australia, with other major coal producers also hit by weather that has disrupted production.
"There are problems in Colombia, Richards Bay (in South Africa) is running low on stocks, and it's still rainy season in Indonesia," Atkins said.

Many coal analysts are still in the process of updating their forecasts for the Japanese fiscal year contract, with informal estimates varying widely from $120 per tonne to $140 per tonne. Morgan Stanley updated their Japanese fiscal year forecast to $130 per tonne in a report released on Tuesday.

Japan is Australia's largest thermal coal buyer as well as the country with the largest demand for seaborne thermal coal globally. Source: Reuters

Rekomendasi HD Capital, 19 Januari 2011

Berikut rekomendasi dari HD Capital untuk perdagangan Rabu, 19 Januari 2011.

BUY: (ITMG, ADRO, BUMI, BJBR)

• Optimisme terhadap laporan kinerja keuangan 2010 diharapkan dapat mengangkat IHSG dari trading range ini
   
• Kelihatannya penjualan asing mereda di level IHSG ini dan bila masih ada order besar yang belum dipenuhi akan dilakukan di posisi pasar naik mendekati high lama (diatas 3.770)
   
• Sektor batubara dan perbankan layak dilirik untuk akumulasi

• IHSG close (18-01) 3.522.717(-12.280/-0.35%) (Val.Rp.2.7T)

• Support: 3.510-3.450, Resistance: 3.590-3.650-3.720

 

Stock picks:

1.    Indo Tambang Raya (ITMG): (BUY) (Target: Rp 54.600) (close 18/01 Rp 51.550)

• Kenaikan harga batubara membuat asumsi pertumbuhan laba untuk 2011 dinaikkan ke 20% dengan asumsi harga penjualan rata-rata (ASP-average selling prices) naik dari US$ 70/ton ke US$ 91/ton
   
• Reserve yang cukup memberikan umur hingga 4-6 tahun dan kas sekitar US$ 350 juta dapat digunakan untuk aquisisi tambang tambahan bila diperlukan
   
• Valuasi 2011F PER 12x cukup menarik versus regional average 14x

• Entry: (1) Rp 51.200, Entry (2) Rp 49.500, Cut loss point: Rp 48.700

 

2.   Adaro Energy (ADRO) (BUY): (Target: Rp 2.800) (Close 18/01 Rp 2.625)

• Optimisme pasar bahwa harga batubara dapat terkerek hingga US$ 500/ton tahun ini pasca terjadinya banjir di Australia membuat asumsi spot price 2012 dinaikkan hingga US$ 134/ton.
   
• Diperkirakan laba emiten dapat tumbuh dua kali lipat tahun ini versus tahun sebelumnya (2010) dan 3 x lipat versus 2009 pasca kenaikan permintaan batubara
   
• Entry (1) Rp 2.600, Entry (2) Rp 2.500, Cut loss point: Rp 2.450

3.   Bumi Resources (BUMI) (BUY): (Target: Rp 3.400) (Close 18/01 Rp 3.125)

• Sensitivitas laba terhadap kenaikan batubara, dan berbagai skema restrukturisasi utang persero melalui alliansi dengan Rothschild-Vallar yang dapat terlaksana tahun ini memberikan stamina untuk BUMI meneruskan perjalanan mengetes resistance target di Rp 3.400.
   
• Proyeksi keuntungan perusahaan atau CAGR (compound annual growth rate) 2010-2012 diperkirakan tumbuh 80%, tertinggi di sektornya

• Entry: (1) Rp 3.025, Entry (2) 2.975, Cut loss point: Rp 2.850

 

4.   Bank Jawa Barat (BJBR) (BUY) (Target: Rp 1.350) (close 18/01 Rp 1.180)

• Valuasi yang sangat menarik (2011F PER 10.2x & PBV 1.9x) dengan ROE di atas 20% membuat emiten pemain mikro UKM-koperasi ini layak diakumulasi untuk antisipasi oversold rally dalam proses tren recovery pembalikan arah ini pasca koreksi berlebihan.

• Entry: (1) Rp 1.160, Entry (2) Rp 1.130, Cut-loss point: Rp 1.100

 

 

Dibuat oleh: 

Yuganur Wijanarko

Senior Research HD Capital (Yuganur@hdx.co.id)

Rekomendasi Beberapa Sekuritas, 19 Januari 2011

Berikut rekomendasi dari tiga sekuritas ternama untuk perdagangan Rabu, 19 Januari 2011.

 

1. E-Trading Securities

Pada perdagangan Selasa (18/1) IHSG ditutup naik 12 poin (0,37%) ke level 3.548,65 mengikuti kenaikan sebagian besar indeks di Asia. Nilai transaksi mencapai Rp 4,2 triliun. Peningkatan indeks masih ditopang oleh sektor pertambangan dan perbankan. Asing kemarin melakukan net buying Rp 38 miliar dengan sektor yang paling banyak dimasuki adalah perbankan dan telekomunikasi. Secara teknikal, IHSG masih terlihat bergerak mixed dengan tekanan jual pada sesi pertama, meski akhirnya ditutup positif. Hari ini indeks diperkirakan akan bergerak di kisaran 3.509-3.584 dengan saham-saham yang dapat diperhatikan antara lain BDMN, ADRO, dan INCO.

2. Erdhika Sekuritas

IHSG bergerak mixed pada perdagangan kemarin dan ditutup pada level 3.548.65, menguat 12,92 poin (0,36%). Penguatan terbesar dicetak sejumlah saham sektor pertambangan sebesar 1,82%. Indeks hari ini berpotensi menguat terbatas pada kisaran 3.521-3.563 dengan saham-saham pilihan ADRO, BJBR, dan BORN.  

3. Waterfont Securities

Indeks harga saham gabungan (IHSG) hari ini diperkirakan menguat terbatas di kisaran 3.535-3.575. Indeks kemarin ditutup naik 12,92 poin (0,37%) menjadi 3.548,65. Penguatan indeks didukung oleh faktor teknikal dan peningkatan (rating) Moody’s atas Indonesia. Secara teknikal, IHSG sudah oversold dan investor asing sudah melakukan aksi jual besar-besaran. 

Only 15 pct of Australia Queensland coal mines fully operating

* Twenty-five percent of Queensland mines still offline
* Recovery likely to take longer than for 2008 floods
* Cost to industry seen at A$2.3 billion

Only 15 percent of the 57 coal mines in Australia's Queensland state are fully operational after devastating floods, with damage to the industry estimated at A$2.3 billion, an industry body said on Tuesday.

Australia accounts for about two-thirds of global coking coal trade, with around 90 percent of that coming from Queensland, and the disruptions have pushed global prices sharply higher as buyers scramble for alternative supplies.

About 60 percent of Queensland mines are operating under restrictions and 25 percent are yet to resume operations after waters flooded coal pits, damaged rail lines and closed ports over the past few months, the Queensland Resources Council said.

Rio Tinto , BHP Billiton and Xstrata are among the companies involved in coal mining in Queensland.

While the majority of coal mines in the region are already either fully or partially back to production, it will still take months until operations return to normal, industry experts say.
"Recovery work has started now for most companies, but it will probably be several months before things are at full capacity. Being up and running is one thing, being at full capacity is another," said Andrew Harrington, an analyst at Patersons Securities in Sydney.


Catching up on lost production will likely be more difficult than in 2008, the last year major flooding hit the Queensland coal industry, when companies swiftly made up about half of the production they had lost during the flooding.

"It's going to be a lot more difficult this time. The rail disruptions are much bigger, the duration and extent of this has been much longer and wider, so it's going to be harder for the total production catch-up to get close to what it achieved in 2008," Harrington said.

Rio Tinto said force majeure declarations put in place at four of its Queensland coal mines due to flooding in December are still in place.

While Rio's Australian hard coking coal output was up by a fifth in 2010, it slid from the third to the fourth quarter and is likely to drop further as the full impact of the Queensland floods is felt.

If coal mines take time to resume output following the Australian floods, leaving steelmakers short of the material, iron ore demand , one of Rio's other major products could suffer as well.

But some say lessons learned in 2008 will help mines get back to full production faster.

"Slightly better prepared assets suggest that they might be back on their feet quicker than expected. There is also the push from the government to make sure the industry is up on its feet as quickly as possible," said Mark Pervan, an analyst with ANZ Bank in Sydney. 

Lost production has already pushed spot prices for hard coking coal above $300 per tonne, and prices are likely to remain at that level or continue to climb for a prolonged period due to the flooding, Morgan Stanley analysts said in a note on Tuesday. 

Hard coking prices could reach as high as $500 per tonne, energy consultancy Wood Mackenzie said last week.

Rail firm QR National , the biggest coal freight firm in the state, has been working around the clock to reopen rail lines and said some key lines would be back in service this week.

"However, it is also clear that the restoration of rail services to mines west of Brisbane and in the Surat Basin are going to take much longer," Queensland Resources Council Chief Executive Michael Roche said. 

Roche also said that environmental regulations, which require treatment of water removed from mines, were hampering efforts to return to normal operation and the Council, which represents mining and exploration firms in the state, has requested an exemption, seeking permission to dump water pumped from mines into creeks. 

Queensland's environmental regulatory body said on Tuesday it had granted temporary permission to 20 coal mines to pump out excess floodwater and is considering applications from another 16 mines.

STEEL MILLS HIT

The surge in coking or metallurgical coal prices is likely to hit steel mills, pushing up prices for steel globally and forcing steelmakers to look elsewhere for coking coal supplies. 

JFE Steel Corp , the world fifth-biggest steelmaker, said it is increasing purchases of coking coal from countries other than Australia, like the United States, China, Russia and Indonesia. JFE relies on Australia for about 80 percent of the 17 million tonnes coking coal it uses per year. 

Steel prices are likely to climb to $780 per tonne in 2011, an increase of 11 percent from the previous forecast of $705 per tonne, according to Morgan Stanley estimates, mostly due to higher input costs as the coking coal market grows tighter. 

But it is a difficult time for steelmakers to be lifting prices given thin demand and some steel mills, particularly in top producer and consumer China, are probably not sticking to planned price hikes. 

"If steelmakers tell the market we're raising our prices to cover out cost, that doesn't mean that they get that," said Scott Laprise, steel analyst at CLSA in Beijing. "In this kind of market I would say the pricing power is not good for steelmakers in general."

 

South Korea's POSCO, the world's No.3 steel producer, last week warned it would be difficult to fully pass on rising costs to customers as it tries to secure its coal needs from regions other than Queensland. ($1 = 1.006 Australian dollars). Source: Reuters

Indonesia's motorcycle sales in 2010 rise 26 pct

Indonesia's 2010 domestic motorcycle sales, an indicator of consumer demand, rose 26 percent from a year earlier to 7,369,249 units, industry data showed on Tuesday.

Sales volumes last year were led by Honda , Yamaha , and Suzuki , according to data from Indonesia's Motorcycle Industry (AISI).

The association said total sales volumes for two-wheel vehicles in December 2010 were 513,343 units.

Indonesia's motorcycle sales this year may reach eight million units, the chairman of the association was quoted as saying by local media.

The Indonesian government plans to stop the use of subsidised fuel for private cars in the Jakarta region after the first quarter, but not for motorcycles, which is seen helping support sales growth for two-wheelers. Source: Reuters

Coal Prices Reach Two-Year High as Flooding in Australia Curbs Production

Power station coal prices rose for a seventh week to a more than two-year high and steelmaking coal gained 5.7 percent after heavy rain and flooding curbed output in Australia, the world’s biggest exporter of the fuel. 

The price for thermal coal at the port of Newcastle in New South Wales, the benchmark for Asia, jumped $6.70, or 5.1 percent, to $138.50 a metric ton in the week ended Jan. 14, the highest since September 2008, according to IHS McCloskey, a Petersfield, U.K.-based provider of coal data. 

Queensland’s worst flooding in 50 years may have cost A$2.3 billion ($2.3 billion) in lost coal sales, Queensland Resources Council estimates, with only 15 percent of the state’s mines operating at full production. BHP Billiton Ltd. and Xstrata Plc are among producers who’ve said they may miss deliveries. 

“All the ports are itching to go, none of them have capacity constraints at the moment,” Greg Smith, general manager of operations at the Dalrymple Bay export facility, said by phone. “We’re loading everything we possibly receive. It comes back to the ability of the mines to supplement the stockpiles that we’re drawing down. We’re kind of hand-to-mouth at the moment.” 

Australia is the largest shipper of steelmaking coal and trails only Indonesia in exports of power station coal. The country shipped 259 million tons of the two commodities in 2009, the World Coal Association website shows. The deluge may cut output by about 15 million tons, according to National Australia Bank Ltd. 

Coking Coal Prices

Dalrymple Bay is one of two terminals at Hay Point port, the biggest export harbor for steelmaking coal. The facility is 1,000 kilometers (621 miles) north of the capital, Brisbane. There are 40 ships waiting to load cargoes, with a further eight vessels expected by the end of the month, Smith said.

Australian hard prime coking coal used by steelmakers sold for $280 a metric ton on average last week, up from $265 the week before, according to IHS McCloskey. That’s the highest price for data going back to the week ended Nov. 5. Prices may reach $300 a ton this year, McCloskey said yesterday. 

Some flooded Queensland coal mines may take as many as six weeks to resume production, National Australia Bank analysts led by Michael Bush said yesterday in a report. The stoppages are resulting in about A$600 million of lost revenue a week at current prices, he said. 

Global prices for coking coal may reach between $400 and $500 a ton because of the floods, according to consultant Wood Mackenzie Ltd. The scale of the deluge is worse than the heavy rainfall of 2008, Wood Mackenzie said.

$300 Contracts

Heavy rain and flooding across Queensland in 2008 left steel producers, including Japan’s Nippon Steel Corp. and JFE Holdings Inc., with a threefold increase in annual contract prices to about $300 a ton. 

Australian free-on-board prices may climb to $295 a ton for three-month contracts starting April 1, Ben Westmore, a minerals and energy economist at the National Australia Bank in Melbourne, said Jan. 14. Prices may surge to $292.50 a ton, Melbourne-based Morgan Stanley analysts Peter Richardson and Joel Crane wrote in a Jan. 5 report. 

Steel mills agreed to pay $225 a ton for the three months starting Jan. 1, Bank of America Merrill Lynch analysts said last month. Free on board is a term indicating that delivery at the seller’s expense is included in the invoice price. 

Coking coal suppliers traditionally held annual talks with steelmakers to fix benchmark contracts for the 12 months from April 1, the start of the Japanese financial year. BHP has urged the industry to move to short-term deals to make prices more responsive to market changes. It agreed with JFE Holdings to the first three-month accord in March last year. Source: Bloomberg

Danamon Jumps Most in 20 Months on DBS Speculation

PT Bank Danamon Indonesia rose the most in 20 months in Jakarta trading amid speculation DBS Group Holdings Ltd. will buy a stake in the Indonesian lender, according to Teguh Hartanto, an analyst at PT Bahana Securities. 

Danamon, owned by Singapore’s Temasek Holdings Pte and Deutsche Bank AG, surged 11 percent to 5,950 rupiah at the 4 p.m. Jakarta time close, the steepest increase since May 19, 2009. The Jakarta Composite index gained 0.4 percent. 

“Talks about an investor looking to buy a company prompt the market to assume that the company must be doing well,” Andrew Siahaan, an analyst at PT Reliance Securities in Jakarta, said. Furthermore “a new investor may provide Danamon with fresh funds that it could use to expand lending.” 

So far there’s no plan for a change in the bank’s ownership, Vera Eve Lim, finance director at Jakarta-based Danamon, said in a mobile-phone text message. Temasek said in a statement it declined to comment. 

DBS “aims to have a more diversified geographic reach over time,” Edna Koh, a DBS spokeswoman in Singapore, said in an e- mailed statement. “We will build this out through organic growth, and are not averse to inorganic expansion. However, these opportunities will depend very much on strategic fit, pricing, and market dynamics. Any scenarios linking us to specific names are purely hypothetical, and we are not in discussions on acquisitions at this time.” 

Temasek owns 27 percent of DBS, Southeast Asia’s biggest bank by assets, according to data compiled by Bloomberg. 

Danamon is trading at 12.8 times estimated earnings, below the average multiple of 14 of shares on the Jakarta Composite index. The stock has risen 22 percent over the past year compared with a 34 percent gain on the benchmark stock index. Source: Bloomberg

Indonesian Coal Producers Recommendation Buy, Nomura

Four Indonesian Coal Producers, PT Adaro Energy (ADRO IJ), PT Indo Tambangraya Megah (ITMG IJ), PT Tambang Batubara Bukit Asam (PTBA IJ) and PT Bumi Resources (BUMI IJ) were rated “buy” in new coverage at Nomura Holdings Inc.

Nomura said it was “bullish” on Indonesia’s coal mining industry given the outlook for demand globally and in the domestic power industry.

Rekomendasi HD Capital, 18 Januari 2011

Berikut rekomendasi HD Capital, Senin 18 Januari 2011.

BUY: (UNTR, SMGR, DOID, INDF)

• IHSG kembali terkonsolidasi dalam trading range, namun masih ada bebrapa saham lapis dua dan blue chip yang menarik untuk dilirik.

• IHSG close (17-01) 3.535.731(-33.413/-0.94%) (Val.Rp.3.2T)

• Support: 3.510-3.450, Resistance: 3.590-3.650-3.720

 

Stock picks:

1.    United Tractors (UNTR): (BUY) (Target: Rp 23.600) (close 17/01 Rp 22.200)

• Segmen bisnis alat berat diperkirakan melebihi ekspektasi pada 2011 (skenario pertumbuhan penjualan berada di atas 26%) sehingga dapat offset penurunan produksi di sektor mining batubara akibat cuaca buruk.

• Entry: (1) Rp 22.000, Entry (2) Rp 21.500, Cut loss point: Rp 20.900

 

2.   Semen Gresik (SMGR) (BUY): (Target: Rp 9.050) (Close 17/01 Rp 8.800)

• Pasar ekspektasi harga penjualan rata-rata semen akan dinaikkan pasca laporan keuangan Q4 2010 keluar yang dapat menaikan pertumbuhan penjulan di sektornya 
   
• Secara valuasi masih termurah di sektornya (2011 PER 11x/PBV 2.9x)

• Entry (1) Rp 8.700, Entry (2) Rp 8.500, Cut loss point: Rp 8.300

 

3.   Delta Dunia (DOID) (BUY): (Target: Rp 1.470) (Close 17/01 Rp 1.410)

• Perseroan sedang mengalami pembalikan arah dari sebelumnya kekecewaan laba yang turun pada 2010 ke ekspektasi pertumbuhan kembali di 2011.
   
• Manajemen mempunyai kapasitas untuk menaikan margin pengerukan batubara sehingga dapat re-financing kembali utangnya dengan bunga yang lebih rendah
   
• Bila masih terjadi koreksi rekomen akumulasi

• Entry: (1) Rp 1.370, Entry (2) 1.340, Cut loss point: Rp 1.310

 

4.   Indofood Sukses Makmur (INDF) (BUY) (Target: Rp 5.000) (close 17/01 Rp 4.825)

• Dominasi pangsa pasar mie instan dan susu di Indonesia, distribusi yang luas serta kebon CPO dan pabrik tepung yang terintegrasi membuat perusahaan ini sangat efisien untuk mengatasi kenaikan harga bahan baku gandum.
  
  
• Persero berencana menaikan harga jual retail mie instan 7-10% tahun ini.
   
• Valuasi saham ini juga menarik di 2011F PER 13.5x/PBV 2.7x dengan tema diuntungkan dari eksposure ke CPO 
   
• Entry: (1) Rp 4.800, Entry (2) Rp 4.725, Cut-loss point: Rp 4.625

 

 

Dibuat oleh: 

Yuganur Wijanarko

Senior Research HD Capital. (Yuganur@hdx.co.id)

DEALTALK-SE Asia M&A could hit record this year but greed a risk

* Singapore, Malaysia, Thai corporates to invest abroad
* Indonesia could see inbound deals, high price a deterrent
* Resources, retail and finance are hot sectors
* Sellers reluctant to part with prized assets even at top prices
* Value of deals could exceed 2007 record of $132.8 billion

The value of deals involving Southeast Asia looks set to top the boom of 2007 as the region's fast-growing economies attract investors and cash-rich companies snap up overseas targets to drive growth.

Foreign investors are finding it easier to strike deals in Singapore, Thailand and Malaysia compared to India and China, where companies and buyout firms have sometimes struggled due to high valuations and restrictive ownership.

But the reluctance of some sellers to part with prized assets even at high valuations is a big risk for larger deals in Southeast Asia, especially in red-hot Indonesia where some recent retail deals have failed to take off.

"Regional companies are in a very strong cash position and global players are more eager than ever to gain exposure to Southeast Asia's compelling fundamentals through purchasing assets here" said Helman Sitohang, a managing director at Credit Suisse in Singapore.

Malaysia's biggest lender, Maybank , kicked off 2011 with a $1.4 billion offer to buy Singapore broker Kim Eng , a reflection of what could come this year as regional companies seek growth outside their home markets.

Sectors such as natural resources, financials, real estate, as well as telecoms, media and technology are expected to be the most active in this region, said Giles Ong, managing director for Southeast Asia's mergers and acquisitions at Citi Global Investment Banking.

Indonesia -- the biggest economy in the region -- is opening up, attracting multinationals and private equity firms in retail, finance and the resources sector. "The high valuations in Indonesia should encourage sellers to sell their assets. As for the buyers, if they are considering to invest for the long run, this should not be a problem," said one senior analyst at a European investment bank based in Jakarta.

"Some of these buyers are coming to Indonesia to get a bigger market, for example in retail or financial sectors, while those coming to resources sector, they are here to secure raw materials for their productions," said the analyst who was not authorised to speak to the media.

Bankers say dealmaking in the region could exceed the record 2007 level when Southeast Asian companies were involved in $132.8 billion worth of deals, spurred by a jump in outbound activity, according to Thomson Reuters data. 

"I think the flow of deals will be much more balanced. Asian companies will look overseas more than they have been doing historically but I don't think the flow to this region will stop," Sitohang, who co-heads Credit Suisse's investment banking division in Asia.

CASH HOARD

Singapore could see more outbound deals as some of its large telecom, resources and energy firms are sitting on big cash piles that could be used for M&A overseas, bankers said.

These companies also have the firepower of state investor Temasek, which manages $134 billion and holds significant stakes in Singapore Airlines , Southeast Asia's biggest bank DBS and Singapore Telecommunications . 

 

Bankers said that Singapore companies, the most cautious in the region, could be more active now as signs emerge that the global economy is recovering, making this the right time for firms to reduce their cash pile. 

Resources' companies such as Wilmar , the world's biggest listed palm oil firm, and Olam also want to increase their plantation areas through acquisitions and are diversifying into new commodities. 

Armed with $6.2 billion cash, Wilmar is in the process of building up its sugar business, which could take them as far as Brazil, following a $1.5 billion acquisition of Australia's Sucrogen last year. 

In Thailand, energy and resources companies such as PTT group , top coal producer Banpu and power producer EGCO , have enough cash for acquisitions and are expected to keep buying new energy sources and assets overseas. 

"The stronger baht has created great opportunity for Thai firms. Although, the currency is now slightly weaker, it should not stop the plans as making M&As should focus on synergy rather than costs," said an investment banker from a major Thai bank who declined to be identified. 

Malaysia's plan to turn the country into a high income economy is likely to drive acquisitions, particularly from government-linked corporations. State investor Khazanah set the ball rolling last year with its $2.6 billion deal to buy Singapore-listed hospital operator Parkway . 

"We expect a spate of M&As, domestic and regional, and privatisation activity due to low leverage levels, easy access to relatively low funding rates, and government leaning on the private sector to spur the economy," said Haizan Johari, UBS' head of Malaysia equities.

And companies which held back on expansion during the recent financial crisis are unlikely to reward shareholders with larger dividend payouts in the near term due to better business opportunities in Asia. 

"I don't think many companies will return excess cash to shareholders as there are still a lot of opportunities for growth in almost all sectors," said Credit Suisse's Sitohang.Source: Reuters

Telkom to rethink CDMA deal with Bakrie

PT Telekomunikasi Indonesia , the nation biggest telecommunication firm, is re-evaluating a fixed-wireless deal with PT Bakrie Telecom worth nearly $1 billion as it now wants a majority stake, Telkom's chairman said on Monday. 

Reuters last year quoted sources as saying Bakrie Telecom would acquire the CDMA unit of PT Telekomunikasi Indonesia in a share deal worth up to $1 billion, but Telkom chairman Jusman Syafii Djamal said on Monday that the arangement would be looked at again. 

"We need to re-evaluate this ... we want to be the majority owner," he said, after a meeting with the state enterprise minister. 

Talks between the two companies have beein going on for months, but Djamal said there was no certainty it would be concluded before the end of the year. 

TelkomFlexi, Telkom's CDMA unit, is Indonesia's biggest CDMA operator with about 15 million subscribers and a strong presence offshore from the country's main Java island. Bakrie Telecom with 11 million subscribers is strong on Java. Source: Reuters

Coking Coal Prices May Jump to $300 a Ton as Australian Floods Curb Supply

Coking coal may reach $300 a metric ton this year in the spot market as flooding in Australia crimps supply and demand gains in China and India, coal researcher McCloskey Group Ltd. said. 

“There will be higher demand for coking coal this year, while supplies are most likely going to be less,” Gerard McCloskey, the founder of the U.K.-based company, said in an interview in New Delhi. “There are more steel capacities coming up in Asia this year and there has been a recovery in consumption in the European Union and U.S.”

BHP Billiton Ltd., Rio Tinto Group, Xstrata Plc and other coking coal producers in Queensland state, which supplies about half of global output, have said they may miss deliveries after Australia’s worst floods in 50 years. Steel usage may rise 5.3 percent this year, the World Steel Association estimates. 

Steelmakers including ArcelorMittal and Nippon Steel Corp. may have to pay about 38 percent more than 2010 prices in the spot market if steel gains or hovers at the present level of $700 a ton, McCloskey said yesterday in the interview. The average contract price for coking coal next year will be higher than this year’s average $214.50 a ton, although supplies from U.S., Canada, Mongolia, Indonesia, Russia and Mozambique plug a part of the deficit from Queensland, he said.

Global Demand

Global coking coal demand may gain about 7 percent this year to 245 million tons from about 230 million tons in 2010, said McCloskey, who is attending a three-day steel conference that began yesterday in New Delhi. Shipments may rise to 415 million tons by 2020, he said. 

About 15 million tons has already been lost in the Queensland floods, of which a third is thermal coal, said McCloskey. Mongolia may supply 25 million tons to 40 million tons to China, easing the burden, McCloskey said. 

Indian steelmakers may double coking coal imports to 60 million tons by 2017 and 90 million tons by 2020 as newer capacities come on stream each year, he said. China’s coking coal imports will probably rise to 110 million tons by 2020 from 37 million tons in 2009 and about 53 million tons last year, he said. 

Prices of hard coking coal may reach between $400 and $500 a metric ton after rainfall intensified in Australia’s flood-hit Queensland state, consultant Wood Mackenzie Ltd. said on Jan. 15. 

Coal for use in power stations may rise to more than $197 a ton from the current $140 at Australia’s Newcastle port, the world’s biggest coal-export facility, according to an e-mailed report dated Jan. 14. The Edinburgh, U.K.-based company did not provide comparative prices for hard coking coal, or state a time period for the forecast gains. Source: Bloomberg

Australian Coking Coal Rises 5.7% as Floods Disrupt Supplies

Australian coking coal rose 5.7 percent last week as rains and flooding in the state of Queensland disrupted supplies of the steelmaking material. 

Queensland, which suffered its worst floods in 50 years, supplies half of all seaborne coking coal, according to Bank of America Merrill Lynch. A rail line serving Peabody Energy Corp. and New Hope Corp. coal mines suffered “substantial damage,” the state’s transportation minister said today. Repairs may take as long as three months, GrainCorp Ltd. said today. Flooding also affected the states of Victoria and New South Wales. 

“Weather conditions are not improving drastically,” Amrita Sen, a London-based analyst with Barclays Capital, said by phone today. “Even if they were, restart of mines and ports would take some time.” 

Australian hard prime coking coal sold for $280 a metric ton on average last week, up from $265 the week before, according to researcher IHS McCloskey. That’s the highest price for data going back to the week ended Nov. 5. Prices have yet to decline since that date. 

About 15 million tons of coal has been lost to the Queensland floods, of which about a third is thermal coal used to generate power rather than make steel, Gerard McCloskey, founder of the Petersfield, England-based company, said in an interview.

Six Weeks

Mongolia may supply 25 million to 40 million tons of coal to China, McCloskey said. China is the world’s biggest coal user. 

Flooded Queensland coal mines may take as long as six weeks to resume production, National Australia Bank Ltd. said in a report today. BHP Billiton Ltd., Rio Tinto Group, Xstrata Plc and other coking-coal producers in the state have said they may miss deliveries.

Thermal-coal prices at the Australian port of Newcastle, an Asian benchmark, rose 4.9 percent last week to $136.30 a ton, according to London-based globalCOAL. 

Between 5 million and 7 million tons of thermal coal, or about 1 percent of global exports, may be lost to the Queensland flooding, Emmanuel Fages, a Paris-based analyst at Societe Generale SA, said in a report dated today. 

“The floods come at a time when regional needs are subdued,” Fages said. “Cargoes could up to now be diverted and additional volumes found in Indonesia. Australian exporting ports were able to continue exports using existing stocks so far.” He raised his 2011 forecast for Newcastle coal prices by 16 percent to $131.30 a ton. 

The price of thermal coal from Richards Bay, South Africa, site of the continent’s biggest coal-export facility, increased 1.8 percent to an average $128.62 a ton, McCloskey said. Rains in the country have delayed trains, interrupting deliveries of coal to the Richards Bay terminal from mines operated by Xstrata and BHP. Source: Bloomberg

BCA Kuasai 1% Saham Bank Ekonomi

PT Bank Central Asia Tbk (BBCA) melakukan penyertaan sebesar 1% saham di PT Bank Ekonomi Raharja Tbk (BAEK). Akta jual beli dilakukan antara BCA dengan PT Surya Sakti Investments, salah satu pemegang saham BAEK.

Bank Ekonomi merupakan anggota dari Grup HSBC. Melalui HSBC Asia Pacific Holdings (UK) Limited, Grup HSBC menguasai 98,96% saham Bank Ekonomi. "Penyertaan modal ini merupakan suatu langkah positif dalam mengembangkan kerja sama yang lebih luas antara BCA dengan Grup HSBC," jelas Presdir BCA DE Setijoso.

Sebelumnya, pada 27 Juni 2008, BCA juga melakukan hal yang sama terhadap Bank DBS Indonesia, yakni melakukan penyertaan modal 1%. Bank DBS Indonesia merupakan anak perusahaan dari Development Bank Singapore Ltd dengan kepemilikan 99%.

Moody's upgrades Indonesia's sovereign ratings

Moody's Investors Service said Monday it upgraded Indonesian government's foreign- and local-currency bond ratings to Ba1, from Ba2, with stable outlook. 

Moody's said in a statement that its main reasons for the move were the country's economic resilience, accompanied by sustained macroeconomic balance; improvement in the government's debt position and the central bank's foreign-currency reserve adequacy; and improving prospects for foreign direct investment inflows.

"We have upgraded the sovereign credit ratings, as the momentum in the economy is expected to be sustained by steady domestic demand, a reasonable pace and sequencing of policy and structural reforms, and rising foreign direct investment," Aninda Mitra, Moody's lead sovereign analyst for Indonesia, said in a statement. 

The upgrade affects the country's ceiling for foreign-currency bonds, which was raised by a notch to Baa3, and the foreign-currency bank-deposit ceiling, which was raised to Ba2. Source: Market Watch

Tin Price May Surge to $40,000 on Global Deficit, Malaysia Smelting's Anuar Says

Tin, the best performer last year of the six principal base metals traded in London, may rally to a record $40,000 per metric ton as global supply may lag behind demand until at least 2013, according to Malaysia Smelting Corp. 

“You still have upside,” Mohd. Ajib Anuar, group chief executive officer of Malaysia’s largest producer, said in an interview. A price of $35,000 to $40,000 in the next five years “is not impossible” as demand climbs, new mines take longer than expected to start output, and ore quality drops, Anuar said. 

Tin, used in electronics and packaging, was the first base metal to reach a record last year after the worst global recession since the World War II. The metal rose 59 percent in 2010, touching $27,500 per ton on Nov. 9, on increased demand and supply disruptions in Indonesia, China and Africa. Barclays Capital has forecast a global shortage of 17,000 tons this year. 

“In real terms, the peak was over $40,000 and today it’s $26,000,” Anuar said on Jan. 14 in Singapore, referring to the price in 1980 adjusted for inflation. 

According to the U.S Geological Survey, tin averaged $8.46 a pound ($18,646 a ton) that year, equivalent to about $22.39 a pound last year when adjusted to reflect the change in the value of money. 

Three-month tin futures on the London Metal Exchange ended at $26,850 a ton on Jan. 14. Its performance last year eclipsed rallies in nickel, which gained 34 percent; copper, which surged 30 percent; and aluminum, which climbed 11 percent. Zinc dropped 4.1 percent and lead gained 4.9 percent last year.

Timah’s Outlook

PT Timah, Indonesia’s largest tin exporter, said on Jan. 14 that production may drop in 2011 for a fourth straight year as bad weather disrupts operations. Output may be 37,000 to 40,000 tons this year compared with 40,000 tons last year, Corporate Secretary Abrun Abubakar said. Tin futures recovered from intraday losses of as much as 1.1 percent that day to end level. 

A La Nina weather pattern has brought heavier-than-usual rain to parts Asia this year and last, curbing tin production in Indonesia, the biggest exporter. Power cuts in China, the world’s largest producer, also curbed output. In the Democratic Republic Congo, Africa’s largest tin producer, a general ban on mining was imposed in September in three eastern provinces. 

The global tin deficit may be 21,300 tons this year after an estimated 25,100 ton shortfall in 2010, according to industry group ITRI Ltd. Malaysia Smelting is one of ITRI’s board members. There was a deficit of 15,700 tons from January to October last year, according to the World Bureau of Metal Statistics. 

ITRI has also forecast deficits in 2012 and in 2013, after which new supplies from Morocco, Russia and Australia are expected to begin, according to Anuar. “I’m not as optimistic,” he said. “I think the lead time will be much longer, so maybe the deficit will be longer.”

‘Very Promising’ 

Demand will be underpinned by growth in the electronics and chemical industries, with use in batteries and glass-making having “a very promising outlook,” Anuar said. London Metal Exchange inventories of tin shrank 39 percent last year, the largest decrease since 2004. 

While there are reserves to support tin consumption for the next 20 years, the quality of ore is declining, meaning less metal is extracted from each ton of earth. That’s driven up the cost of production, Anuar said. 

“Because of the lack of exploration for more than two decades, since the collapse of the tin market in 1985, all the richer deposits and the more-accessible deposits have been mined,” said Anuar. Source: Bloomberg