Rally in thermal and coking coal prices might trigger some returning to the market. Discipline production cut, La Nina, and the upcoming winter season, however, might support thermal coal in the short-medium term.

Rallies in key commodities, especially oil & gas, palm oil, thermal coal, and metals might help the State Budget 2016 to contain short-term pressures from the shortfall in tax collections. Crude oil is now traded 10% above budget, while other commodities gained more in the third quarter.

Golden Energy Resources Ltd, a company controlled by Sinarmas Group, intends to boost its coal production in Indonesia to 12 million tons next year. Combined with output from Berau Coal Energy (BRAU), Sinarmas Group will become third largest coal player in Indonesia behind Bakrie Group (Bumi Resources) and Adaro Group.

Malaysian company Genting Plantations Berhad has completed acquisition of two plantation companies in Indonesia for a total cash consideration of US$42.15 million. SGX-listed Bumitama Agri Limited, meanwhile, has acquired additional land bank in Indonesia from one of its shareholders.

Shares of coal producers were mostly in green zone Monday (Sept 19) as some investors continued to speculate on new supply-demand balance in the seaborne coal market. China Shenhua gained 1.7% in Hong Kong, while Adaro Energy (ADRO) recovered 2.58% in Jakarta. Weak price of crude oil, however, weighs further rally in the commodity.

Gold is currently traded above US$1300 per ounce, representing 15% increase from average realized price in the third quarter of 2015. Some gold mines in Indonesia with all-in-sustaining costs (AISCs) below US$700 per ounce should gain more. Others, however, are struggling.

Pretty much as predicted, Asian equities opened higher this morning to follow Wall Street, which ended significantly higher Monday. The Fed’s outlook on interest rate contributed to correction of USD, which might support commodities.