Palm Oil Corrections
The benchmark March 2017 contracts of crude palm oil (CPO) dropped RM44 to RM3070 per ton Thursday (Dec 22), while contracts beyond April 2017 were settled below RM3000 per ton respectively. The Commodity has dropped significantly from its recent peak as some traders anticipate higher production next year.
Short-Term Support for Coal
Indonesia generated export revenues of US$1.55 billion from mineral fuel (coal) last month, an increase of 10% from October, thanks to over 20% increase in average reference price of thermal coal. Rally in international market triggered the government to set an even higher reference price of US$101.7 per ton for December. The rally ended early this month, but hermal coal recovered in the past few trading days to record 5.5% gain to US$87.55 per ton, based on over-the-counter (OTC) and contract for difference (CFD) financial instruments quoted by tradingeconomics.com.
The Alarming Oil & Gas Balance
Indonesia suffered US$5.22 billion of deficit in oil and gas trading for the first 11 months of 2016. It declined 5.8% from the corresponding period of 2015, but mostly a function of falling average prices of oil and gas. Volume-wise, it’s pretty alarming, especially if the country can’t figure out ways to push through major pending projects.
Rubber Lifts Plantation Sector
Rally of natural rubber price continues. In Tokyo this morning, the commodity advanced 2.2% to 278.3 yen per Kg. While this is still way below its historical high (526.4 yen/Kg in February 2011), the commodity has gained nearly 100% from its low in early January.
Q&A with Jonathan Handojo on Indoferro
PT Indoferro, member of The Growth Steel Group (GSG), is preparing an initial public offering (IPO). We might see the offering in second quarter of 2017, depending on progress of its second nickel pig iron (NPI) smelter and market dynamics going forward. We have recently interviewed Jonathan Handojo, business development of GSG, about Indoferro, pioneer of NPIs in Indonesia.
Oil Rally, Coal, & Palm OIl
Oil deal lifted energy equities worldwide Monday. Oil and gas producers Santos Ltd and Woodside Petroleum gained 5.12% and 2.91% in Sydney, while KrisEnergy jumped 10% in Singapore. PetroChina inched up 0.55% in Hong Kong despite broad-market correction of China equities that day. In Europe, BP gained 2.3% in morning trading, while Total inched up 0.33%.
Key Takeaways from Bumi Resources 9M Report
Bumi Resources (BUMI), the largest coal producer in Indonesia, is among the best performing stocks year-to-date with 335.3% gain. At the current price, BUMI has market cap of Rp10.84 trillion despite of its negative equity of US$2.86 billion by Sept 30, 2016. What’s interesting from its financial report for the first nine months of 2016?
Coal market: Mixed Data
Shares of coal producers end mixed worldwide Thursday as investors got mixed market data. Coal prices in OTC market continued its correction to US$84 per ton, but strong November import by China suggests difficulties in resumption of domestic production.
35,000 MW Program: The Players
Most of major power plant projects under the signature 35,000 MW program have been granted out to global players like Sumitomo, Shenhua, Marubeni, Sojitz, Itochu, etc. There are also local big players like Adaro, Medco, and Sinarmas. More medium local players, however, have joined the program.
M&A: SIPEF’s Acquisition of Plantation Company Agro Muko
Belgium-based firm SIPEF, through its Indonesian subsidiary PT Tolan Tiga Indonesia, has agreed to acquire 47.71% shares in PT Agro Muko, a mixed palm oil and rubber plantation company, for US$144 million. SIPEF acquires the shares from PT Austindo Nusantara Jaya Tbk (ANJT) and UK-listed MP Evans Limited. The deal is interesting for several reasons.