Coal miner NHC is up +33% so far in calendar 2026, significantly outperforming its ASX peer Whitehaven (+2%) in what’s been a fairly volatile year, as is often the case for cyclical commodity stocks. NHC delivered a strong quarterly update in May, covered here, as the company continues to mine and sell more coal; it’s delivering on what it can control; the coal price is a different matter.
The near-term risk of easing Middle East tensions has played out, with lower energy prices reducing the fuel-switching tailwind that has supported coal demand. However, surging global energy demand from AI and electrification leaves us bullish towards the unpopular fossil fuel, which still satisfies roughly a quarter of global energy demand and around one-third of global electricity generation, illustrating why the fuel remains far more critical in the global energy system than the transition narrative often implies. A slight hiccup in the supply-demand balance for energy in the coming year (s) could easily see NHC trading in the $6.50-7 area.
- We like the risk/reward towards NHC back around current levels for yield- MM holds NHC in the Active Income Portfolio.
MM is long and bullish towards NHC around $5.30
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