JAKARTA (Yosefardi) – Shares of coal producer PT Adaro Energy Tbk (ADRO) dropped 4% this early morning trade to Rp940 per share, gaining 45% from its bottom at Rp650. But the stock had fallen 38% from its peak at above Rp1,500 year to date.
Investors sold down Adaro Energy on concern over coal royalty hike implemented by January 2014. Royalty expenses of Adaro Energy reached US$383.7 million last year, about the same with the company’s net profit of US$385 million.
Currently coal producers pay coal royalty of between 3% to 7% of coal produced, while by January they have to pay 10% to 1`3.5%
Its peers Indo Tambangraya also lost 3.55% to but in thin volume. The stock had gained 24% from bottom, but dropped 25% year to date.
Bumi Resources also fell 1.16% and Harum Energy slipped 0.75%. While Borneo Lumbung Energy jumped 4.55%. The stock had lost 54% year to date.
Fundamentals of coal market have not changed despite positive data from China, mainly due to high supply from Indonesian producers.
Benchmark price of Indonesia coal inched up to US$76.9/ton for this month, down 10.8% year-on-year. While coal players initially expected significant recovery in the fourth quarter of 2013, must now believe that substantial improvement might be seen in the second quarter of 2014, but subject to no deeper crisis in India.