Target $18.72, page-6039

Further speculation around suitors for BHP's assets in The Oz:

Stanmore Coal is believed to be back in the race for BHP’s coal assets after initially failing to make the cut, say sources. It is understood that six parties have been short-listed for Queensland coal mines Daunia and Blackwater...Stanmore’s Indonesian rival BUMA, Peabody Energy, Whitehaven Coal, Yancoal and Coronado Energy.

There have been some big numbers thrown around for the sale process. One suggestion is that BHP’s Blackwater mine could sell for as much as $6bn, and Daunia up to $3bn. Yet most around the market say they would be surprised if the assets were sold for such big numbers. However, it would all come down to the coal price and production projections being attributed to the assets.Groups like Coronado may partner up to fund an acquisition.

Earlier, Yancoal was said to be gunning hard for the portfolio and was shaping as the frontrunner in the competition.The company is 62 per cent owned by China’s state-owned enterprise, the Yankuang Energy Group, while the state-owned China Cinda Asset Management owns about 13.7 per cent of the group.

In China news...

After a slow start to the year, China's coal imports are back to pre-covid levels, which has been reflected in record stockpiles at coal plants.

But why is all the coal needed with sluggish factory activity, heavy falls in exports to US and South-East Asian markets and a depressed property market? Prudence; not wanting another 2021 situation when the relevant minister demanded 'get coal at whatever cost'? Capitalising on bottom prices? Faith in a short rebound perhaps fuelled by impending government stimulus?

Perhaps part of the reason is China has been sweating it out with a prolong heat wave with 40 degree days and more expected to come. "'Electricity will be in high demand this summer and we are prepared,”'Chen Tao, vice-president of the state-owned company told reporters in a media briefing on Thursday. 'We will closely monitor the commodity market to buy more coal at reasonable prices.'"Furthermore, drought-depleted hydropower drives China to turn to coal.

In India news...

Imports of coal show no slowing down - "thermal and steam coal registered a 14 per cent yoy growth in traffic to reach 11.9 million tonnes. Overall, coal traffic rose by 20 per cent in May." India is also preparing for a tough summer but also has a directive of 6 per cent blending of imported coal.