But I’m struggling to make sense of the landscape.
Peabody (BTU) is the largest US producer (i own shares) and reported a large paper loss today due to hedging which apparently they will make back when they actually deliver the coal. But they haven’t been actually to deliver very much due to “rainstorms in Australia” (despite most of their mining in Wyoming at PRB). BTU is active in both metallurgic (steel) and thermal (electric). What’s going on with them?
The second largest US producer is ARCH which also has a lot of operations at PRB. Their revenue breakdown is a little confusing (thermal also appears under cooking) but it seems they are about half metal and half thermal? They also sold less coal due to “not enough trains.”
Alliance Resource Partners (ARP) seemed to actually produce more coal but I could only find yearly results from the recent call. How was the Quarter specifically?
Then there are pureplay metals like AMR.
Question: Given inflationary environment, Russia conflict and sanctions, China lockdowns, and possibly slowing growth which of these is best positioned? Is there still enough demand for steel to support sky-high metallurgic prices?
Leave a Reply