Natural Rubber Rally
Natural rubber advanced 3.2% to 236.8 yen per Kg in Tokyo Thursday, Nov 24, the highest level since June 2015. This is one of the best performing commodities with 32% gain in the past few weeks, according to data from tradingeconomics.com. Further rally and implications?
Ambitious Targets for 2017, Revival of Darma Henwa?
Coal mining contractor Darma Henwa (DEWA) has set a more ambitious operational and financial targets for 2017. Sales revenue, for example, is projected to almost double to US$519 million, while gross profit would skyrocket to US$54 million from an estimated of US$15.9 million this year. Will these impress market participants?
Palm Oil & Plantation Shares
The benchmark February 2017 contracts of crude palm oil (CPO) ended higher by RM24 to RM2952 per ton on the Bursa Malaysia Derivatives Monday, while March 2017 contracts were settled at RM2933. The chance is big to see significant improvement in financials of plantation companies in the fourth quarter of 2015 and first half of 2017.
Merger & Acquisition Updates
We’ve seen increasing merger and acquisition activities in Indonesia in the past few months, including in the resources sector. SGX-listed coal producer Geo Energy Resources Ltd with operating mines in Kalimantan has completed the acquisition of PT Surya Tambang Tolindo, which holds a concession area of 4,600 hectares in Damai sub-district, Kutai Barat Regency.
Coal Journal
Thermal coal has retreated from its recent peak, but shares of coal producers recovered Tuesday. Deeper corrections might be prevented by difficulties in China to resume production, shown by 12% fall in output last month, and higher demand ahead of winter season. China’s domestic coal production fell 10.7% to 2.74 billion tonnes in the first 10 months of 2016 despite improvements at China Shenhua in recent months.
Gross Split for Oil & Gas
Newly appointed minister of energy and mineral resources Ignasius Jonan revealed a plan to change revenue split between the State and contractors from cost recovery scheme to gross split. A more simplified gross split system is expected to boost attractiveness of Indonesian oil and gas industry.
Consolidation of Coal Shipping Industry
Baltic Dry Index, gauge of global shipment of bulk materials, gained 29% last week to 1257. That means the index surged 142% year-on-year to tracking iron ore and coal, which gained 32.4% and 100% year-on-year, despite recent corrections. While prospect of commodities remains uncertain, some investors have also speculated in the shares of shipping companies listed on Indonesia Stock Exchange.
Speculations on Medco Energi
Medco Energi (MEDC) has acquired two big assets: shares in Batu Hijau gold & copper mine in West Nusa Tenggara from Newmont and Sumitomo and shares in Natuna oil and gas assets from ConocoPhillips. The combined acquisition consideration for these assets is around US$3 billion. As such, people continue to speculate on ownership change at Medco Energi.
Correction in Coal and Shares
tradingeconomics.com recorded coal price of US$106.25 on November 18, 2016. That means the commodity retreated 3.28% from the previous week. Coal, however, scored 16.25% gain in November and 103% year-on-year. Shares of coal producers listed on Indonesia Stock Exchange (IDX) have retreated by 13% to 25% last week. Has the commodity touched its peak and started a long and painful correction?
Aneka Tambang, Cita Minerals, & Indonesia’s Alumina Smelters
Indonesia officially has two alumina smelters now. One smelter grade alumina (SGA) is operated by PT Well Harvest Winning Alumina Refinery (WHW)—a JV between Harita Group’s Cita Mineral Investindo (CITA) and China Hongqiao. One chemical grade alumina (CGA), meanwhile, is operated by a joint venture between Aneka Tambang (ANTM) and Showa Denko (Japan). Financials?