No problem. Below are some of my posts from the last 18 months on why I think that the coal sector in general has more downside than upside. It is a lot of reading, well done if you get through it all. For me, it was a fun trip down memory lane.
You will see that following Trumps win, future coal prices have fallen off substantially for coking and thermal coal. I mentioned this back in March 2024 and recently in July 2024, and it has played out.
I look back and see that in my exit post I said to hold, and noted a possible rebound given the cyclicality that is prevalent in commodities. WHC did in fact rebound well, going from $6.70 to $8.50 a year later. Would have been a nice profit if one could have stomached the strong falls to $6 and below during that time. I know I couldn't.
Even with WHC most recent quarterly the cash received per ton is strong. But Trumps possible abolishment of sanctions on Russian coal is the sword of Damocles to speculators on the coal sector, especially leveraged ones. This may well be part of some sort of deal in ending the war. Coal mining executives continue to spruik the idea of a never-ending future where coal is continually in short supply, despite it being sickeningly abundant. I dare say the exact opposite of what they want us to believe is the truth.
AUD is weak which helps somewhat to margins, production costs are at about US$95 per ton, while realised prices (including premium for quality) is at a healthy US$160. Realised prices for the coming quarter will obviously be somewhat lower. Noone knows how low this will go. I still maintain that coal price must go below production cost to swing back the tide of over production and in time stymie demand from lower prices and constitute the squeeze that comes about through the combination of the two. Then, and only then do we get a high chance of a bull run at gate.
WHC Price at posting:
$5.96 Sentiment: Sell Disclosure: Not Held
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