The Need to Speed Up Gas Pipeline Infrastructure
Compared to public transportation, Jokowi administration spent relatively small budget in the development of city gas pipeline infrastructure, even though significantly better than the previous administration. As domestic consumption of liquefied petroleum gas (LPG) continues to hurt the trade balance and State budget, it is time to deploy more resources in addressing the issue.
Revisiting Alakasa Group’s Alumina Smelter Project
Aluminium industry player PT Alakasa Industrindo (ALKA) Tbk is among the best performing companies with sales revenue of Rp1.93 trillion last year, jumped 68% from 2016. In the first quarter of 2018, the Company recorded sales revenue of Rp921 billion, skyrocketed 588% from the corresponding period last year.
Coal Journal
Thermal coal ended higher by 1.4% to US$107.25 per ton last Friday, lifted by trade war between China and the United States, growing import outlook from India, and long fasting month and Lebaran holidays in Indonesia. The commodity also tracked oil and heating oil, which already gained 58% and 54% year-on-year respectively.
First Ferromanganese Smelter in Indonesia
After years of waiting, Indonesia will soon have its first manganese smelter in Kupang, East Nusa Tenggara province. The smelter, built by a partnership between ASX-listed Gulf Manganese Corp and Fofo Sariaatmadja, will produce ferromanganese, an alloy of iron and mangaese used in the production of steel.
Electric Vehicles Continue to Support Nickel (3)
Nickel retreated to US$15,107 per ton Friday (June 15), but represented year-on-year gain of more than 70% as market participants anticipated recovery of nickel ore shipments from Indonesia in the coming weeks following the end of Ramadhan fasting month and Lebaran holidays. Medium-long term prospect, however, remains to be supported by faster growth of electric vehicles.
Short-Term Support for Coal
Thermal coal retreated to US$110.5 per ton Friday (June 15), but this represented year-on-year gain of 37.7% due to relatively strong demand for the commodity from Northeast Asia’s economic powerhouses. Difficulties of major miners in China to lift output continued to support the commodity. It is true that China’s raw coal output increased to a new high last month, but demand grew faster.
Update on Samin Tan’s Borneo
PT Borneo Lumbung Energi & Metal (BORN) Tbk, producer of coking coal, booked net profit of US$56.75 million in the first nine months ended Sept 30, 2017, improved from US$50.3 million in the corresponding period of 2016. The Company, which just released the statement, recorded sales revenue of US$194.64 million in the period, jumped by 120% from the same period of 2016 on higher volume and average price.
EV Sales Continue to Support Nickel
LME nickel ended lower by 0.65% to US$15,355 on Friday (June 8), but this represents 72% gain year-on-year. The commodity has been trading above US$12,000 per ton for most part of the year, supported by strong sales of electric vehicles worldwide.
Commodities & The Economy
The benchmark August 2018 contracts of crude palm oil (CPO) ended lower by RM9 to RM2400 per ton Tuesday (June 5). That means the commodity lost 12.2% year-on-year, which will squeeze margins of plantation companies for most part of the year because at the same time, input costs, especially energy, are higher.
EVs Continue to Support Nickel
Electric vehicle sales in USA for May yet to be released in full, but the popular Tesla Model3 recorded sales volume of 6,250 units in the month, jumped 61% from the previous month. Toyota Prius Prime also reported strong sales growth of 11.3% to 2,924 units. While not as fast as China, sales of EVs in USA already jumped from 116,099 in 2015 to 199,826 last year.