Sakari

Sakari: -4.0% at $1.20, deepening declines in late trading. While the stock may be weighed by concerns Indonesia may limit coal exports, despite a senior energy official noting that the country has no current plan to do so, coal-price concerns could be a bigger factor. SCB note that Indonesia's low-rank coal appears most vulnerable to more rapid downward price pressure. Expect heavy downside pressure to continue unabated. As higher-quality coal finds a new price floor, think low-rank coal may be most vulnerable as generators and end-users cherry-pick higher-grade coal for the same price paid previously. Note low-grade coal typically has a higher moisture level and lower carbon content, reducing its heating value. Indonesian producers and traders may find it difficult to attract buyers, apart from price-sensitive utilities and those with low-rank coal-blending capabilities. With the stock at its lowest levels since May 2009, chart-based support looks distant; $1.00 could offer near-term psychological support.