- Coal futures surpassed the mark of US$179 per metric tonne in September 2021.
- The prices have reached record highs on the back of robust demand and tight supplies.
- IEA predicts that the demand for global electricity is expected to rise by 4% in 2022.
The recent coal rally has triggered future contracts to trade more than US$179 per metric tonne. Just last year, Coal futures traded as low as ~US$50 per metric tonne due to subdued demand. Coal prices have grown as much as 120.5% in 2021.
However, the futures surpassed the mark of US$179 per metric tonne for the first time in September 2021 on the back of strong demand from the power sector, especially in India and China.
Despite a robust push from the government to decarbonise the global economy, a huge upsurge has been recorded in the demand for power. As per the International Energy Agency, the demand for global electricity is expected to increase by 4% in 2022. Adding on, the significant coal producers, including Indonesia have been struggling with their supplies due to bad weather conditions. Even more, the trade war between China and Australia has squeezed the country’s imports from Australia, creating a shortage of raw material in the country and boosting coal prices.
Related Article: Why are coal prices at decade highs?
In the backdrop of this, let's have a look at five ASX-listed coal stocks that are capitalising on the record coal rally.
Source: ASX as of 10 Sept 2021
New Hope Corporation Limited
Headquartered in Brisbane, Australia, New Hope Corporation Limited (ASX: NHC) is one of the leading coal players in the country. The company was founded in 1952 and has operations in New South Wales and Queensland.
The company has produced 3,972kt of total ROM coal in the July ending quarter, nearly 18.6% up from the previous quarter. Full-year production landed at 14,002kt in FY21.
Good read: Why New Hope Corp lurched to loss in 1H FY21
Yancoal Australia Limited
Yancoal Australia Limited (ASX:YAL) has its headquarters in New South Wales. It is a pure-play coal producer and engaged in the production of metallurgical and thermal coal. The company has its operations in NSW, Western Australia, and Queensland.
YAL’s revenue during the first half of FY21 was AU$1.78 billion with attributable saleable production of 17.5Mt.
Whitehaven Coal Limited
Australia’s biggest independent miner, Whitehaven Coal Limited (ASX:WHC) has its headquarters in Sydney. The company develops and operates underground and open-cut coal mines in NSW.
Whitehaven’s managed ROM coal production during the 2021 financial year was 20.6Mt. The company has recorded a net loss of AU$87.3 million during the period.
Coronado Global Resources
Coronado Global Resources (ASX:CRN) is one of the largest metallurgical coal producers in the world. CRN holds and operates various coal mines in Australia and the US. Coronado holds the Curragh Mining Complex in Queensland along with three mining operations in the Central Appalachian Basin.
Coronado has recorded a saleable production of 8.8MMt with a sales volume of 8.9MMt during the first half of the financial year 2021. The company's revenue during the period was AU$800.4 million.
BHP Group Limited (ASX:BHP) has its headquarters in Melbourne Australia. BHP is a diversified mining company that holds coal businesses in Queensland and NSW. The company also holds one Colombian coal project.
BHP’s underlying EBITDA during the FY21 was US$37.4 billion while the attributable profit for the tenure was US$11.3 billion.
Amid rising demand for power generation and ongoing supply disruptions, Coal prices continue to grow. The coal miners have been benefitting and are focusing on ramping up their operations.