Steel Industry & Metals
World crude steel production for the 67 countries reporting to the World Steel Association (worldsteel) was 136.5 million tonnes (Mt) in January 2017, a 7.0% increase compared to January 2016, lifted mostly by 7.4% growth of China’s output to 67.2 million tons in the month and euphoria in President Trump’s infrastructure program.
Possible End of Freeport in Grasberg (2)
Government is flooded with support from politicians, including those from opposition parties, and community leaders in responding threats from Freeport to take the disputes to international court of arbitration. Leaders of the so-called Cipayung Group, consisted of various students associations, for example expressed their support in a meeting with President Joko ‘Jokowi’ Widodo Tuesday (Feb 21). While minister of energy and mineral resources Ignasius Jonan continued his nationwide campaign to get public support, telling audiences that Freeport’s contribution to the State is significantly smaller than Telkom (the state telecommunication company).
Palm Oil Journal No.6/2017: Results & Outlook
The palm oil market is currently in its low production cycle, but as effects of the El Nino drought have receded, most expect that somewhere during the second half of 2017, the market will see a very strong output with higher yields per hectare. Contracts for April 2017 and beyond are already reflecting a massive discount.
Possible End of Freeport in Grasberg
Shares of Freeport McMoRan (FCX) ended lower by 1.06% in New York last night even when copper prices advanced 3.3% to US$2.74 per pound. Some investors were nervous about conflict between Freeport and the government of Indonesia regarding operation of Grasberg, Papua, which is one of the world’s largest and most profitable gold-copper mines.
Freeport & New Realities
Endless disputes between the government and Freeport Indonesia are, among others, rooted in difficulties of Freeport to deal with new realities. Key executives of the US-based mining giant are still living in the Cold War era. New generation of leaders in Indonesia, on the other hand, have explored and tried to benefit from new realities.
Coal Journal No. 8/2017: Domestic Consumption
Domestic consumption of thermal coal is set to grow faster with commercial operation of some mineral processing plants all over the country. One new ferronickel smelter in Obi Island, North Maluku province, for example, has recently entered commercial production with support from 114 MW coal-fired power plant.
Nickel Smelters (4): Tsingshan & Xinxing
Nickel ended at US$10,900 per ton on London Metal Exchange (LME) Friday (Feb 17), the highest level since Indonesia resumed export of low-grade nickel ore, even though opening stocks grew further to 379,494 tons. As explained before, with or without export of low-grade nickel ores, supply of nickel from Indonesia would continue to grow in the coming years from commercial operation of new smelters—-nickel pig iron (NPI) and ferronickel.
Softening of Palm Oil
The benchmark May 2017 contracts of crude palm oil (CPO) lost RM42 to RM2926 per ton on the Bursa Malaysia Derivatives Thursday due to fading impact of El Nino and positive outlook for soybean crop in South America. January output of Malaysian companies was lower than December, but grew significantly year-on-year.
Coal Journal No. 07/2017
Thermal coal prices ended flat at US$79.9 per ton Wednesday. The commodity has lost 3.62% this month, but still gaining 52.48% year-on-year. Strong import data from China in January and weak output from Chinese miners failed to boost the commodity because falling output in China last month was attributable to Lunar New Year holidays.
Freeport Pushes Government over The Edge, Next?
Shares of Freeport McMoRan ended higher by 1.01% in New York Monday (Feb 13), significantly smaller than peers like Vale SA (+8.41%), Rio Tinto (+3%), or Eramet (+4.7%) as reports from Indonesia suggested temporary halt of its Grasberg gold-copper mine operation. Some senior staffs have reportedly been dismissed, while others might follow if Freeport Indonesia can’t secure copper concentrate export permit soon.