“Coal stocks are proxy buy of the Chinese economy because China consumes 50pc of the worlds coal, and the Chinese economy is losing lustre. Prices of coal stocks going forwards would be a reflection of outlook for coal in the years ahead, still around but suffers risk of dampening demand due to climate pressures.”
The IEA are forecasting plateauing of worldwide demand to 2025, but even if coal demand was to plateau, that is not decline or not increase, together with further supply constraints (due to not approving new coal mines) this can only see prices increasing or staying elevated for longer.
“The energy crisis narrative is over.”
Is it though? Coal prices are still well above prices since mid 2021 when the energy crisis commenced. I think it’s only getting started. The $400 prices that we saw were never sustainable. The northern hemisphere were lucky to only receive a mild winter rather than a cold winter. There is no guarantee that this will be the same for this upcoming winter in the northern hemisphere.
