I think the electrification / decarbonisation thematic has confused quite a few birch. Me included until I opened up to the real macro direction here.
Decarbonization requires electrification. Electrification requires > steel faster requires > coal faster particularly met. This is a decades game not 2022 or 2023.
India and China (+ more) westernisation and industrialisation requires baseload energy provision means > coal demand until their generation mix changes (not soon as a hint).
ESG means <investment in coal production + fewer mines approved to open/re-open = < supply vs > demand = pinch point. Ukraine just puts this into stark relief.
Are we only at the beginning of the pinch point?. This is the key question to answer.
ESG driven fund selling creates an opportunity. Is that opportunity just for retail as miningnut indicated or for other global funds, generators or even satellite funds (ie black ops under the radar funds associated with those forced to sell due to ESG...).
Agreed there will be a phasing out process at some point. But I wouldn't be short right now.
I for one will be shorting the f out of coal when it's finally on the way out (for real). But I'm not sure if I'll still be in the game then.
CRN Price at posting:
$2.14 Sentiment: Hold Disclosure: Held
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