President Joko ‘Jokowi’ Widodo said export ban on bauxite will be implemented in June 2023.  Given the country’s position in the world of aluminium, this policy might not be challenged by other countries like nickel. As to whether it will attract more investments in smelter grade alumina (SGA) like what happened in nickel, time will tell. 

We have seen fast growing number of nickel trading companies in the past few years alongside massive investment in domestic smelting capacities. Some big groups, including Indika Energy (INDY), have even entered the nickel ore trading business. There are some notable traders we identified recently.

Nickel advanced 5.4% to US$30,660 per ton on the London Metal Exchange (LME) Wednesday (Dec 7), the highest level since early May 2022. Other than the usual supply-demand and macroeconomic dynamics, reports about strong sales of electric vehicles (EVs) in Europe and China might have contributed to the recent rally. 

Newcastle coal futures, the benchmark for the top consuming region of Asia, moved towards the US$400 per ton mark, more than 150% above last year’s level, on prospects of continued robust demand and tight supplies, Tradingeconomics.com reported.

Central Omega Resources (DKFT) has repeatedly announced plans to build second and third phase of nickel pig iron (NPI) smelter to boost output from 100,000 tons to 300,000 tons per annum. Looks like, however, that this program has been stalled in the past few years.

Small nickel players have tried to build smelters, including Central Omega Resources (DKFT) and Ifishdeco (IFSH), but most of them failed and ended up being nickel ore suppliers to major companies, including Tsingshan Group.

Nickel has been the hottest commodity searched by almost everybody in the past few years because of the fast growing sales of electric vehicle and movement to green energy worldwide. Almost all major business groups in the country have ventured into the commodity, including the likes of Adaro Group (through Merdeka Copper), Bakrie Group, Jhonlin Group, Indika Group, and Harum Energy Group.

WTI crude recovered to US$77.4 per barrel in Asian trading this morning on news about production cut, but the commodity has fallen nearly 10% in the past 30 days, which is good for Indonesia. On the other hand, thermal coal surged 8.8% to US$380 per ton, a very profitable price for Indonesia, the world’s largest exporter.

Coal trading firm Sumber Global Energy (SGER), controlled by Welly Thomas, booked profit attributable to owners of  Rp709 billion in the first nine months (9M) to September of 2022, jumped significantly from Rp74 billion only in the corresponding period of 2021, as revenues surged 241% year on year (y/y) to Rp7.48 trillion.