Commodities in Brief
All Ordinaries dropped further by 0.87% Tuesday (Oct 12) morning, dragged down by bellwether BHP Billiton, the world’s largest mining company. Earlier in New York, Freeport McMoRan lost 4.1%, while Vale down 4.2% on profit taking, because metals only retreated slightly in London Metal Exchange.
Speculating in Metals & Energy Stocks (2)
Bumi Resources (BUMI) jumped 25% Monday (Oct 12) morning in Jakarta, even though reference price of Indonesian thermal coal dropped further by 1.46% to US$57.39 per ton for October. Vale Indonesia (INCO), meanwhile, advanced 3.9% as nickel soared 7% in London Metal Exchange Friday.
Rally in Metals & Commodities
Shares of Glencore Plc advanced 7% in London Friday (Oct 9) as its decision to cut significantly zinc production prompted rallies in metals worldwide. Copper jumped 3.26% in New York, while zinc itself soared 10% in London Metal Exchange. Anglo American, another mining giant, advanced 7.23% in London, while Lonmin hiked 16.2%.
Speculating in Energy Stocks
Composite index of Indonesia Stock Exchange (IDX) gained 2.18% to 4589 Friday (Oct 9), but off its high (4612). Still among the best performing emerging market, the index was lifted by broad market sentiment and speculation in energy stocks. Bumi Resources (BUMI), the largest coal producer in Indonesia, jumped 34% with almost half billion shares exchanged hands.
Questions on Mahakam Block Farm-In/Out
Pertamina and Inpex/Total have yet to complete commercial and financial settlement for the future of Mahakam Offshore, the largest gas producing block in the country, whose existing contract expires in 2017. The negotiation is important to watch because it might set the tone for other expiring blocks in the country.
Lights from The Troubled Lampung FSRU
PT Perusahaan Gas Negara (PGAS) Tbk has gained 34.4% from its bottom this year, but still among the worst performing stocks on IDX. It lost 52% this year due to a combination of factors, including slowdown of domestic economy, higher financial charges, and the troubles at floating storage and regasification unit (FSRU) in Lampung, Sumatra. Have we seen the lights from the FSRU?
Update on 35000 MW Program
PT Prasarana Energi Cirebon, unit of PT Indika Energy Tbk (INDY), has just signed an agreement to acquire shares of PT Bayu Inti Permata (BIP) in PT Cirebon Energi Prasarana, which builds 1×1000 MW coal-fired power plant in Cirebon, West Java. This is an expansion of Cirebon-1 coal-fired power plant (CFPP), a JV between Indika, Samtan, and Marubeni Corp.
Commodities-Related Stocks
Rally continues in mining stocks worldwide. Freeport McMoRan jumped almost 10% in New York Wednesday (Oct 7), while Vale SA surged by 7.7%. Earlier in London, Anglo American Plc soared 10%, while Lonmin Plc skyrocketed 33.7%. This morning, BHP Billiton and Rio Tinto advanced 3% each in Sydney.
Pending Issues of Mahakam Block
Central government has on Tuesday (Oct 6) formally handed over 10% participating interest in the giant Mahakam Block, offshore East Kalimantan, to provincial government of East Kalimantan. Still, there are lots of pending issues in the future operation of the country’s largest gas producing block.
Commodities Rally
WTI crude for November delivery settled closer to US$49 per barrel on Nymex Tuesday, while Brent crude surged to above US$52 per barrel. Grains followed with small gains, while metals were mixed. Overall, volatility remains in the commodities market.