WHC 2.52% $6.96 whitehaven coal limited

Power plants will remain with current producers at capped...

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  1. 993 Posts.
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    Power plants will remain with current producers at capped prices, there is no current shortage of coal because there are no NSW power outages. So why draw on coal from a new producer who will likely be more expensive given new logistical routes that need to be established. Their current producers are also covered by this scheme, there is no incentive for them to draw on WHCs available amounts. This is a blanket scheme. We must keep in mind that they are simply making this amount 'available'. There is no obligation to sell, and if power plants do not draw on the amount it will go to the standard international market at ICE prices.

    I think it will work as a market scare, suppressing SP for the next 12 months. Good for BB and that's about it. Even if utilities draw on the 200k of coal per quarter, I doubt they will buy all of it, unless they have plenty of room and cash to stockpile over the next 12 months.
 
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