Commodities

Nickel has fallen 33% year-on-year, leaving smaller margins to miners and smelters. Trimegah Bangun (NCKL) and Merdeka Battery Materials (MBMA) yet to release their financial results for the third quarter, but peers reported mixed results in the period.

Some media outlets quoted Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif saying the government has basically agreed on some issues related to contract extension for Vale Indonesia (INCO), holder of the largest nickel deposit in Indonesia.

Shares of coal miners opened mostly lower ground this morning as investors anticipate further correction in thermal coal price. The commodity declined by 5.7% to US$123 per ton, the lowest level in the past five months.

Using average realized price and sales volume of copper and gold, PT Freeport Indonesia might have generated sales revenue of US$2.37 billion in the third quarter of 2023, an increase of 7.7% from the corresponding period last year. 

Futures of Dr Copper, an important gauge of global manufacturing industry, fell below US$3.6 per pound this month. This is the lowest in over four months as concerns of high interest rates for a prolonged period from the Federal Reserve hampered the demand outlook for industrial inputs, tradingeconomics.com reported.

Nickel has been under pressure in the past few months to fall below US$20,000 per ton, losing 14% year-on-year, but Indonesia recorded an impressive growth in export value of nickel derivatives (mainly nickel pig iron/NPI, nickel in matte, and recently nickel in mixed hydroxide precipitate/MHP).

Indonesia recorded oil and gas deficit of US$10.7 billion in the first seven months of 2023. While it was substantially smaller than US$14.7 billion deficit reported in the corresponding period of 2022, the country needs to speed up development of new projects. Else the deficit will grow bigger, especially if electric vehicle (EV) market failed to expand. 

PT Pertamina International EP (PIEP), subsidiary of state oil and gas company Pertamina, has on Wednesday (Aug 23) signed a non-binding MoU with Buzi Hydrocarbons Pte Ltd (BHPL), an indirect subsidiary of Bakrie Group’s Energi Mega Persada (ENRG) to develop the Buzi block in Mozambique.

Energy and mineral resources ministry will stop development of new nickel smelters using rotary kiln electric furnace (RKEF) technology, which produces second class nickel pig iron (NPI) and ferronickel. Those using high pressure acid leaching (HPAL) technology, however, may proceed.

The government through the Ministry of Energy and Mineral Resources (ESDM) has set a reference coal price (HBA) for the August 2023 period. HBA with a calorie intake 6,322 kcal/kg GAR, total moisture 12.26%, sulfur 0.66%, and ash 7.94% is priced at US$179.90 per ton, lower than July 2023’s US$191.60, following correction in international market.