CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Australian coal stocks are headed for their best week in years after a fire shut down one of country’s major mines, with Morgan Stanley seeing further upside for the commodity.
Whitehaven Coal Ltd. is poised for a 17% weekly advance, its best since October 2022, with Sydney-listed Coronado Global Resources Inc. and Yancoal Australia Ltd. posting similar gains. Coking coal futures in Singapore hit a two-month high earlier this week after a fire at Anglo American Plc’s biggest metallurgical coal project in Australia halted production.
The fire “may help bring about an earlier tightening of the market balance,” Morgan Stanley analysts including Sara Chan wrote in a July 3 note, adding they expect about 15% upside to year-end coking coal prices. “We see a near-term opportunity in coking or met coal, especially after the recent share price pullback.”
The blaze at Anglo’s Grosvenor mine, which started after a methane explosion on Saturday, took roughly 1% of seaborne coal out of the market and could take months to extinguish. It also coincided with the London-based miner’s plans to sell the asset as part of a turnaround plan.
“This unfortunate event does help competitors as they can continue to produce met coal,” said Jamie Hannah, Sydney-based deputy head of investments and capital markets at Van Eck Associates Corp., which holds Whitehaven and Coronado shares. Whitehaven has expanded their operations in met coal, “so this will no doubt play to their short-term advantage,” he said.
Still, “until we understand the issues at the Anglo mine, it’s too difficult to predict the medium to long-term impact,” he added.
(By Georgina McKay and Paul-Alain Hunt)
Read More: Anglo considers options to sell coal assets after fire
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