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Yearender 2022: Commodities boom propels investment boon
Following the year's massive investments in metals and metal goods amid a commodities boom, analysts expect the trend to continue in 2023 and the years to come in line with the global energy transition.
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Heavy equipment excavates the Binungan mine in East Kalimantan belonging to PT Berau Coal on April 4, 2019. Russia’s invasion of Ukraine on Feb. 24 and a surge in demand after COVID-19 restrictions were eased in many countries caused global coal prices to skyrocket in 2022. (JP/Indra Harsaputra)
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ndonesia experienced a massive increase in metals and metal goods investments this year on the back of soaring commodities prices, a trend that some experts believe might be prolonged in line with the global shift toward renewables and electric vehicles (EVs).
Investment Ministry data showed that the basic metal production and metal goods industries grabbed the largest share of foreign investments realized in the third quarter of 2022 at $8.4 billion, followed by mining at $3.4 billion.
“Indonesia’s economy is still heavy on commodities, so this year’s commodities boom had a significant role in pulling in foreign investments,” Ahmad Zuhdi Dwi Kusuma, an industry and area analyst at state-owned lender Bank Mandiri, told The Jakarta Post on Thursday.
Investments in the metals and mining sector were also influenced by long-term investment in strategic metals critical to the energy transition, such as nickel, he added.
Indonesia maintained its trade surplus for a 31st consecutive month in November to reach a sizeable US$ 5.16 billion surplus, even as exports and imports both slowed precipitously.
Exports grew 5.6 percent year-on-year (yoy) on the back of recovery in industrial metals prices as China ended its strict lockdowns, publicly listed Bank Central Asia (BCA) senior economist Barra Kukuh Mamia wrote in a report published on Dec. 15.
On the other hand, the small rise in crude palm oil (CPO) exports since June appeared to be receding, with figures in October temporarily propped up by the Diwali holiday in India.
