Category: Commodities

Coal Journal

Thermal coal was traded above US$106 per ton Monday, supported by various factors, including China’s strong demand for seaborne coal due to difficulties confronted by domestic producers to grow output. China Shenhua Energy Co Ltd, one of the largest coal producers in the world, produced only 295.4 million tons of coal last year, inched up 1.9% from 2016, while gross power generation grew 11.4%.

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Coal Journal

Thermal coal stays closer to US$106 per ton in international market, supported by, among others, weak output in China and United States. Energy and mineral resources Ignasius Jonan jokingly pointed to the relatively strong price behind willingness of mining companies to sign amendment of their respective coal contract of works (CCoWs). Adaro Indonesia and subsidiaries of Bayan Resources, as you know, have recently signed the amendments.

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Mining Industry Updates

Tin is currently traded at US$20,275 per ton, down 4.14% year-on-year, but state miner PT Timah Tbk (TINS) expects to double its net profit this year to around Rp1 trillion. The Company has earlier set capital expenditures of Rp2.6 trillion this year, flat compared to last year, while output will likely be higher than last year.

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China-Japan Competition in Indonesian Oil & Gas (2)

Competition between Japan and China in Indonesia’s oil and gas assets will continue to intensify. Japan, by far, has bigger share in two major LNG projects: Tangguh LNG and Abadi LNG (Masela Block). Japan, through Inpex, was owner of 50% interest in Offshore Mahakam Block, key gas supplier for Indonesia’s largest LNG producer Badak LNG.

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Coal Journal

Shares of coal producers were mostly higher grounds in the region this morning on strong thermal coal price. Indonesian government, meanwhile, has set reference price of thermal coal for January 2018 at US$95.54 per ton (FOB, calories of 6322 Kcal/Kg, sulphur 0.8%, and moisture 8%), an increase of 10.8% year-on-year.

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Coal Journal

Thermal coal advanced to US$104 per ton in international market this week, supported by supply-demand balance. Lower than expected output in India, China, and the United States of America plus rally in crude oil contributed to the 21.35% gain year-on-year. Indonesian miners, meanwhile, might seize the opportunity with higher output this year.

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The Expired Oil & Gas Blocks

The government has actually granted eight oil and gas blocks, whose contracts expired this year, to state oil and gas company Pertamina. Interestingly, Pertamina returned two of the blocks to the government, which will then auction them to third party investors. Why?

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Commodities & 2018 Budget

In contrast to projection from some economists, deficit of State Budget 2017 was only Rp346.7 trillion or 2.57% of GDP. It is also below the target set in the revised 2017 Budget of 2.92%. This was attributable to lower percentage of spending in one hand and higher percentage of State revenues.

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Coal Journal

Relatively strong crude oil price, lackluster recovery of coal industry in the United States of America and continuing de-capacity in China have continued to support thermal coal. The commodity was traded at US$99.35 per ton yesterday to represent 13.35% gain year-on-year.

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Oil and Gas Journal

President Joko ‘Jokowi’ Widodo has signed Government Regulation No. 53/2017 about tax for gross split scheme in oil and gas business. This regulation is expected to boost investment in the sector even though some shared doubts. Other than the new regulatory framework, rally of crude oil might make 2018 a more promising year for investments.

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New Era at Offshore Mahakam Block

By January 1st, 2018, state-owned oil and gas company Pertamina will become new operator of the Offshore Mahakam, the largest gas producing block in the country. During 43 years of production controlled by Total (France) and Inpex (Japan), the block produced 1.5 billion barrels of oil and condensate plus 19 trillion cubic feet of natural gas.

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