Prices continue to surge, with Australian coal leading the charge.
Physical cargoes are trading at significant premiums to paper levels, as China has sent officials to inspect coal inventories and crack down on illicit hoarding at several ports.
As the price of coal surges like an illicit substance, the now back-fired ban on Australian coal continues, going into China’s peak summer generation season.
Pressure on prices is unlikely to subside until the Communist Party’s centenary celebrations in early July. One wonders if someone wrongly interpreted a CCP memo saying, “buy up all the available coke”.
For its part, state-run Coal India is now allowing buyers to export coal bought from them under their e-auction platform. However, we don’t expect this to affect imports of higher quality coal from SA and Australia for stock and trade business.
Thungela Resources went public last week and as expected, saw an initial decline in its share price. However, with SA coal pricing at the 3rd highest USD price ever, and certainly the highest ZAR price ever, the company is undoubtedly a money-printing machine, for now at least.
Should it also become a “regenerative miner” as we are encouraging all coal miners to become as part of the Just Transition, then it may also attract wider ESG funding for sustainable coal production.