BHP’s Outlook for Coal
BHP Billiton, one of the largest coal producers, has decided to sell its metallurgical coal assets in Indonesia to local partner Adaro Energy (ADRO) following a strategic review. The divestment, however, doesn’t change BHP Billiton’s outlook of coal for both thermal and metallurgical coal.
Q&A with Gozco Plantations
Crude palm oil (CPO) retreated significantly from its recent high in the past few weeks as market participants anticipate higher output in the second half. Investors also responded corrections in crude oil and competing soybean oil. Late last week, we had a chance to discuss market issues and specific company issues with Andrew Michael Vincent, director of Gozco Plantations (GZCO), one companies listed on IDX.
Coal Yet to See The Light
Recent correction of crude oil by around 10% delays potential recovery of thermal coal despite continuous efforts from US and China to cut their production. Production cuts, supply disruptions, and increased demand were deemed supporting factors for the return of all major benchmark thermal coal prices to above US$50 per ton last week.
New Nickel Smelters to Watch
Nickel has just returned to above US$9000 per ton in London Metal Exchange (LME), leaving its bottom by around 22%. This price, however, is still too low to make any profit given recent rise of fuel costs. Operation of new nickel smelters, mostly nickel pig iron (NPI), in Indonesia might cap further rally in the commodity though.
Palm Oil Journal
The benchmark August 2016 contracts of crude palm oil (CPO) dropped significantly by RM55 to RM2525 per ton on the Bursa Malaysia Derivatives Monday (June 13) as investors responded the retreat of crude oil from its recent high and anticipated higher fresh fruit bunch (FFBs) in the second half of the year.
Revisiting Bumi Resources Minerals, Strange Payables, & DMS Investama
PT Bumi Resources Minerals (BRMS) Tbk, controlled by Bakrie Group, has just released its full year 2015 results this week. The Company, whose valuable asset is interest in gold and copper producer PT Newmont Nusa Tenggara, posted net loss of US$43 million, down from US$89.3 million in 2014, thanks to share of profit in Newmont.
Coal: Where is the Bottom?
Commodity analysts at Citi Group said last October than thermal coal prices were close to rock bottom as coal producers have squeezed almost all of the gains from increased productivity, lower fuel prices and weaker currencies (Platts, October 5th, 2015). They also predicted thermal coal prices to stabilise in 2016. Reference price of Indonesian thermal coal in the first half of 2016 might be a confirmation of such analysis.
On the Bottoming Out of Commodities (11)
Weak prices of commodities was one of factors leading to Indonesia’s ‘failure’ to get a rating upgrade from S&P, because it affects outlook of revenue side of the State Budget, hence prospect of government spending in infrastructure, among others. This is, of course, an external factor nothing the government can do about.
Multiplier Effects of Mineral Smelters
Indonesian Harita Group and Chinese company Hongqiao will soon operate commercially the first smelter grade alumina (SGA) in Indonesia. The multi billion USD project guarantees revitalisation of bauxite mining at Cita Mineral (CITA), subsidiary of Harita Group, and its subsidiaries.
Palm Oil Journal: Bakrie Sumatra
The benchmark August 2016 contracts of crude palm oil (CPO) advanced RM20 to RM2620 per ton on the Bursa Malaysia Derivatives Tuesday (May 31), supported by firm soybean oil and crude oil. Contracts for September onwards, however, were settled below RM2600 to reflect expectations of short-term corrections on potential higher supply in the third quarter.