Episode 23 - Met Coal Rebound, High-Vol Tightness, and Global Thermal Tailwinds

You could.

You could say the met market is on fire in a couple of different ways.

I mean, really, what the story has been the last couple of weeks is that China has their tight domestic supply has kind of forced them back into the market to restock even before India has gotten their own restocking season going.

Usually, you see the Indians come into the market right around this time of year to come in for those post-monsoon season cargoes.

And their stockpiles remain at levels where They haven't really done that yet.

So we've bounced off the bottom at 219 or 220, something like that.

And now we're back up pretty firmly into the mid-220s.

PLV is sitting right now at 223 on the August future.

But if you look ahead to September, which is the future that's actually trading in volume now, that's all the way up to 236.

And then the physical assessment right now for Margus was 227.45.

So Right now, I think it's clear that we've moved past the shoulder season lull that we were waiting for, you know, in April and May and June and actually have seen it here between, you know, sort of the middle of July and now.

So I think the low point in the floor is behind us.

Generally, when we look at August, August is a good month for Metco prices.

September is usually a pretty good month.

And it's not until October and November that you see markets kind of go the other way.

We are limited on the upside.

You know, if you take a look at Chinese margins at the moment, I want to say about for seaborne coal, about twenty six dollars.

for tier two coal is the margin going into China.

So that, that ARB is open at the moment, but steel margins are really still deeply negative.

So they're capping the upside there, but really the, the big news I'm kind of beating around the bush here is the second fire at Allegheny's Longview mine in central West Virginia happened last Wednesday.

I got an alert while I was on my way back to the Greenbrier and had to on way back from the Greenbrier back home and had to stop at a rest stop and send out alerts and try to get a handle on the situation.

But it sounds worse than the first one, honestly, although the reaction time seems a little bit quicker.

Last we heard, as best as we could tell, the intention was to seal the mine and flood it to put out the fire.

When you actually have fire on high-volt coal, I was told this by three or four different people, actually.

when the coal gets to a certain temperature, it starts to Coke itself.