KKGI News – Several coal mining stocks strengthened during the continuation of the second session on Friday (2/8/2024), amid the rise in benchmark energy commodities over the past two days. According to data from the Indonesia Stock Exchange (IDX), at 3:32 PM WIB, shares of PT Resource Alam Indonesia Tbk (KKGI) surged 5.45 percent to Rp580 per share.
Despite having a market capitalization that’s not as large as other traditional companies—around Rp2.90 trillion—KKGI shares have been on an upward trend since late April. Over the past month, KKGI shares appreciated by 3.57 percent, and since the beginning of the year (YTD), they have surged 57.61 percent.
As previously reported, Newcastle coal futures strengthened on Thursday (1/8/2024) trading, alongside rising European natural gas prices. According to market data, the September 2024 delivery Newcastle coal contract rose 1.70 percent daily to USD143.80 per ton, continuing its increase from Wednesday (31/7) by 1.36 percent.
Meanwhile, natural gas contracts at the Dutch TTF reference hub rose 3.07 percent to EUR36.97 per MWh, the highest level since June 13, when prices reached EUR37.91 per MWh. Similarly, the UK NBP contract hit a two-month high, last traded up by 3.99 percent.
Market analyst Tasmin Chowdhary from Volue told Montel on Thursday (1/8) that supply concerns driven by geopolitical instability in the Middle East pushed natural gas prices up. “Tensions in the Middle East and tight global LNG balances will continue to keep market participants alert, maintaining risk premiums on the TTF curve,” said Chowdhary. She referred to the heightened tensions in the Middle East following Israel’s killing of Hamas political leader Ismail Haniyeh in an airstrike on Tehran, which sparked fears of a broader war in the region. “Additionally, gas consumption in Central and Western Europe has also increased by about 15 percent week-on-week due to the ongoing heatwave, and weather forecasts indicate that hot weather will continue, especially starting mid-next week,” added Chowdhary.
Much of Europe is experiencing a heatwave this week, with temperatures above 40 degrees Celsius. “Nevertheless, other short-term fundamentals remain bearish, with steady gas flows from Norway to Europe and high storage levels,” said Chowdhary.
Energy trader Stewart Spink from Northern Gas & Power noted that the price increase seemed “a bit excessive, as the heatwave is expected to subside soon, so a price reversal may happen in the near future.”
Turning back to coal, according to Trading Economics, despite rapid growth in renewable energy capacity, significant electricity demand growth in major economies indicates that global coal consumption will remain relatively stable this year and in 2025, according to the International Energy Agency (IEA). Furthermore, the latest data shows that seaborne coal imports to China rose 11 percent year-on-year during January-June 2024. In 2023, China accounted for about 27.5 percent of the global seaborne coal market. (Aldo Fernando)
Disclaimer: The decision to buy/sell shares is entirely up to the investor.
