Coal Journal No. 06/2017: Output to Watch
Reference price of Indonesia thermal coal for February 2017 is set at US$83.32 per ton, down slightly from US$86.23 in January, but jumped almost 64% year-on-year. Output from major coal producing countries, including Indonesia, remains key factor to watch in the short-medium term.
Commodities & Indonesian Economy
The benchmark April 2017 contracts of crude palm oil (CPO) opened higher by RM24 to RM3106 per ton this morning, while in Rotterdam the commodity was traded at US$790/ton CIF early this week. Higher soybean oil prices supported palm oil amidst reports of higher production year-on-year last month.
Jokowi, Papua & Freeport
President Joko ‘Jokowi’ Widodo is scheduled to visit Papua this week to inaugurate the Cross-Border Post (PLBN) Indonesia-Papua New Guinea (PNG) in Skouw, Muara Tami district, and tradtional market ‘Pasar Mama Mama’. This will be the eight visit to the eastern most provinces since becoming President of Republic of Indonesia in October 2014.
Revisiting Nickel Projects (2): Tsingshan-Bintang8
Unlike China Hanking, BintangDelapan Group decided to postpone the development of smelter to process low-grade nickel in the Morowali Industrial Park, Central Sulawesi province. The group prefers to export low-grade nickel ores to feed the dormant smelters operated by its partners, Tsingshan Group, in China.
Plantation Journal No. 05/2017
Natural rubber opened lower by 0.92% to 301 yen per Kg in Tokyo this morning, but the commodity is still 103.5% above the same period last year. Crude palm oil (CPO), meanwhile, retreated to below US$800 per ton in Rotterdam late last week on perception about higher January output in Indonesia and Malaysia.
Revisiting Nickel Projects (1): China Hanking
Nickel fell significantly since Indonesian government issued new mining regulations, which, among others, allowing export of low-grade nickel ores. The commodity, key component in the production of stainless steel, however, regained grounds following wider environmental crackdown in the Philippines. Nickel retreated to US$10,160 per ton last Friday in London Metal Exchange (LME), but still substantially higher than the corresponding period last year.
Freeport Indonesia: How about Termination?
Shares of Freeport McMoRan (FCX) ended significantly lower by 5.83% in New York Friday (Feb 3rd) with significant trading volume. Other than tracking copper, which retreated by 2.47% Friday, investors were concerned about status of Grasbger gold-copper mine in Papua, Indonesia. Freeport and the Government are still disputing various issues surrounding status of mining rights, mandatory development of copper smelter, and export duty for copper concentrates.
Coal Journal No. 5/2017: Output to Watch
Thermal coal was traded at US$82.7 per ton on Thursday (Feb 2nd) to represent 57.8% gain year-on-year. The commodity has been hovering above US$80 since October 2016 as crude oil was also relatively stable above US$50 per barrel. Going forward, market participants need to watch closely policy changes in China and US plus difficulties to control output in Indonesia.
ANTM: 2016 Performance & Outlook
Aneka Tambang (ANTM) recorded sales revenue of Rp9.11 trillion (unaudited) last year, down 13.6% from 2015 despite higher production volume of nickel ores, ferronickel, bauxite, and alumina. Going forward, other than impacts of recent government policies allowing export of low-grade nickel and bauxite, dynamics in the alumina, coal, gold-silver would define ANTM’s short-term outlook.
Metals Journal No. 1/2017
The government will likely issue temporary special mining business permit (IUPK) to PT Freeport Indonesia, paving the way for resumption of copper concentrate export. Looks like that the government doesn’t want to bear associated risks, especially local economies and employment, from further delay of export.