WHC +10.61%: Rallied hard today as did the other coal related stocks following a huge spike higher overnight, Newcastle Coal Futures for April +46% in a move that seems a clear anomaly, however those sorts of moves typically play out in a market that is very tight, and getting tighter. While Russia is a key coal supplier (about 15% of European demand), it’s not just a geopolitical issue, the market was getting squeezed from a bunch of different directions over the past year or so;
- Government intervention – Indonesia a coal export embargo in Indonesia (January 2022),
- Weather – La Nina – flooding and infrastructure challenges in NSW and
- Covid – pandemic-related labour shortages in Mongolia and China
So while the rally to MM’s initial target of $4.00 has largely played out, there may be some more juice left in the tank.