I did a top up last week. Around half of US coal producers have now defaulted on their debt, and the two biggest are currently in Chapter 11. Over the next couple of years the highest cost mines will close and existing mines will continue to be depleted with very little new supply coming online over the next few years. Annual depletion is roughly 800mt for thermal coal seaborne market, excluding any new supply. Depletion is currently faster than the level of new supply and will continue to be so while prices remain at these levels. As always timing these things is difficult, best to average in over time near the bottom of the cycle while staying away from weak balance sheets and higher cost producers imo.
NHC Price at posting:
$1.43 Sentiment: Buy Disclosure: Held
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