Coal prices reached an all time high following the COVID supply chain disruptions and then the war in Ukraine. I believe they are certain to normalise in the medium term, for example, China already ramped up production in response and coal mines around the world have been reopening to meet demand. Bet on price normalisation or even oversupply.
See this chart for perspective on coal https://tradingeconomics.com/commodity/coal
As far as coal usage, developed nations continue to reduce reliance on coal whilst developing nations offset this by some margin. China and India set the trend as the largest producers and consumers, where demand is expected to grow at 1% and 4% respectively through 2024, according to the IEA report December 2021. Further from the report: “Coal production is forecast to reach an all-time high in 2022 and then plateau as demand flattens.”
Whitehaven Coal ( WHC.AX ) is an Australian mining company with cyclical business currently at the peak of the cycle. From their trading update in Feb earlier this year: “High prices for thermal coal have driven record half year earnings and cash flows […] Coal prices are expected to be well supported over CY22″.
Sooner or later…
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