PT Vale Indonesia Tbk (IDX: INCO) is projecting a slowdown, both in terms of demand and supply, as commodity prices improve in the global market - Photo by the Company

JAKARTA (TheInsidersStories) – Nickel producer, PT Vale Indonesia Tbk (IDX: INCO) is projecting a slowdown, both in terms of demand and supply, as commodity prices improve in the global market. Even so, the company is still optimistic that this year’ production target can be achieved between 71,000 – 73,000 tons of nickel in mate from last year 71,000 tons of nickel in mate.

Up to the second quarter (2Q) of this year, the miner’ production increased by around 6 percent compared to 2Q 2020 by 17,614 metric tons of nickel in matte. Thus, the total nickel production in 1H was recorded at 36,315 metric tons of nickel in matte from previous year’ 30,711 metric tons of nickel in matte.

“Production in 1H of 2020 was 18 percent higher compared to production in 1H of 2019 due to the shorter shutdown period in the first half of this year,” Nico Kanter, CEO and President Director of Vale Indonesia, said in an official statement released today (07/29).

He adds, in 1H of 2019, the miner conducted a longer planned shutdown for activities related to the Larona Canal Lining project. While, finance director, Bernardus Irmanto stated, the company sees the industry projection is still conservative even though commodity prices are starting to rise.

“From the demand side, in China the availability of stainless steel is quite high and is not absorbed as we expected. So that reduces the projected need for nickel in the industry,” he said.

Not only that, he said, similar conditions occur in the electric vehicle industry which is on the rise, also slowing uptake and production in recent times due to the impact of the pandemic. In the midst of this pressure, the company hopes that growing demand from China can restore this sector.

“We must look again in the next three months the development of COVID-19, both in terms of producers and consumers, which will affect the demand-supply balance in the nickel market,” said Irmanto.

Rudiantara Becomes Commissioner

At the shareholders meeting today, the company appointed a former minister of communication and information for the period 2014 – 2019, Rudiantara as the vice president commissioner. Previously, this position was filled by Mahendra Siregar and has resigned since 25 October 2019 for being the deputy foreign minister.

Now the miner shares are held by the government through PT Indonesia Asahan Aluminum (MIND ID) as part of an amendment to the Contract of Work issued in 2014. The state-owned mining company officially acquired a 20 percent divestment stake on June 19, 2020 from Vale Canada Ltd., (14.9 percent) and Sumitomo Metal Mining Co., Ltd (5.1 percent) worth Rp5.52 trillion ($380.90 million).

This sales transaction is targeted to be completed by the end of 2020. After the completion of the transaction, the shareholding in Vale Indonesia will change to Vale Canada 44.3 percent, MIND ID 20 percent, SMM 15 percent, and the public 20.7 percent.

US$1: Rp14,500

Written by Editorial Staff, Email: theinsiderstories@gmail.com