couldn't help myself and opened a modest long position at this morn's open of $5.52. It's clear some mines are struggling with viability at current prices and feel WHC in better shape despite debt etc.
Found a very detailed article by BHP re commodities. The piece below is just a small extract. Link provided at the end.
Steelmaking coal
Price volatility remained a feature of the steelmaking coal industry over the last twelve months, but relative to the wild price swing seen in the early 2020s, the magnitude of change in the first half of CY24 was modest.
The regional demand picture was mixed with strong steel production growth in India and Southeast Asia, and recovery in Europe, offsetting output contractions in Northeast Asia. On the supply side, operational challenges have remained a regular feature of the market, with only small improvements reported to date this year. For CY25, overall seaborne supply in the steelmaking coal market is expected to be in mild surplus as supply continues to recover, but the supply of premium coals should stay relatively tight.
China’s reliance on the seaborne market has become limited over the last few years, particularly with more landborne imports from Mongolia (CY23 imports reached 54 Mt, up almost 60% from CY19 levels). With India firmly embedded as the largest and fastest growing steelmaking coal import region, the likelihood of seaborne trade clearing in India has increased.
Longer term, we argue that a policy focus on sustainable development in Chinese coal mining, in addition to the drive towards decarbonisation for steel making, should highlight the competitive value of using higher–quality coals at China’s coastal integrated mills. China’s steel industry is still in the optimisation phase of its decarbonisation journey, in which these higher-quality materials can improve energy efficiency and so reduce greenhouse gas (GHG) emissions intensity for the BF–BOF route, which accounts for around 90% of Chinese crude steel production.
Our analysis also suggests blast furnace iron making, which depends on coke made from steelmaking coal, is unlikely to be displaced at scale by emergent technologies for decades. The argument hinges partly on the sheer size of the existing stock of BF–BOF capacity (70% of global capacity today) and the still quite young BF fleet in China – the major producer, but also on the large amount of new BF capacity expected to come online in India and Southeast Asia in the coming decade.
That is to say nothing of the large challenges still facing nascent zero to low emissions intensity steelmaking technology around the world today. We are acutely aware of progress being made in this space, as we highlight in the BHPCTAP 2024.
In terms of steelmaking coal supply, most committed and prospective projects are expected to be mid quality or lower, while industry intelligence implies that some mature assets that have historically produced higher-quality coals are drifting down the quality spectrum as they age.
According to Wood Mackenzie, new hard coking coal projects will be needed by the early 2030s to meet projected demand under its base case outlook.
Additionally, the regulatory environment has become less conducive to long–life capital investment in Queensland, Australia. We expect that these regulatory challenges and anticipated supply issues could sustain a potentially durable scarcity premium for higher-quality coals on the PLV FOB index over the medium term. The advantages of coking coals at the higher end of the quality spectrum with respect to GHG emissions intensity are an additional factor supporting this overarching theme: an advantage that could become increasingly apparent if carbon pricing becomes more pervasive.
Following completion of the divestment of the Blackwater and Daunia mines in May 2024, around 90% of our tonnes will reference the PLV FOB index, approximately, up from around three-quarters pre–divestment.3 And that is materially higher again than it was prior to the divestment of our stake in BHP Mitsui Coal (BMC) during the second half of financial year 2022.
https://www.bhp.com/investors/economic-and-commodity-outlook/2024/08/bhps-economic-and-commodity-outlook
(20min delay)