Still stick to my manipulation theory at this stage looking at buy-side for cxyo.
On a different note, here is a quote from Garnaut that I think is very pertinent to CXY. Basically says that coal-fire electricity will come under increasing costs pressure from both carbon permit costs and from rising export demand - which will force of Australian electricity prices. It then says that those coal fire generators with their own coal supply will benefit from higher profit margins (assuming its not more profitable just to export themselves and shut down their electricity stations). But thinking, this also applies to CXY. It uses coal that would never make it to export markets anyway, whilst also enjoying lower carbon prices due to the ETS. Also, it can probably acquire all the coal reserves it needs quite cheaply b/c of the nature of the caol. If CXY get into electricity generation, it major competitors - coal, CBM and gas fired electricity - will be much more exposed to international price pressures...which are only going to go up. Put simply, electricity will go up whilst inflation pressures on CXY source of electricity will be the least. Sounds good to me! Sorry, if this has been mentioned before...but this particular point about export price pressure impacting competitors more than CXY I haven't read before.
From pg. 480
The fuel mix and cost implications will be strongly influenced by the extent to which new black coal contracts in the domestic electricity sector are negotiated at higher prices and the speed with which domestic gas prices move towards global price parity. The implications for brown coal generators will, in the short term, be dominated by the effect of these factors on their competitors and east coast electricity prices, and therefore their capacity to recover lost volume in prices. It is likely that some coal-fired generators with captive coal supply will stand to reap significant increases in profits from the higher price environment driven by increases in capital costs and gas and black coal prices. There will be a vigorous search for in-plant mitigation including partial fuel substitution. Beyond the commercial limits of in-plant emissions reduction, it is likely that it will be economical for some time for such generators to purchase domestic offset credits or international permits to maintain substantial production despite their high emissions intensity, in an environment in which high gas and black coal prices are underpinning higher electricity prices.
CXY Price at posting:
5.6¢ Sentiment: Buy Disclosure: Held
