Episode 24 - Global Supply Tightness, European Gas Spikes, and the Early Innings of the Coal Rally

But yeah, I mean, the market story is that it's hot.

Prices in the thermal coal world are... are solidly higher across the board, across the world.

And the fundamentals are there to back it up, both on the supply and the demand side.

In Asia and in Europe, coal is definitely in the money versus gas with prices where they are now.

I haven't checked it recently, but we're At 77 euro per megawatt hour on the TTF, checked it last night, and that's over $26 per MMBTU.

So still don't think we're going to Russia war 2022 highs, but it's tight out there in the gas world, and that is definitely lighting a fire under coal.

I think there's a lot of unresolved issues in gas, and there's plenty of coal buying that's just keeping the coal market supported.

I'm bullish.

I'm cautious on going into shoulder season for demand, but I'm bullish for the time being.

If you look at China, China continues to buy their supply side issues in China.

They normally let the coal mines run a little bit above nameplate capacity, and they've been reining that in as part of the um, supply side restructuring that happened after the mine disaster earlier this year.

Um, so China's China's on the, uh, on the buy side.

Um, and, uh, that, that obviously helps markets there.

They're stocking up ahead of the golden week holiday that starts, uh, on October 1st, October one through seven is their big national holiday.

And you do see buying and restocking ahead of that.

So I think we're, I think we're strong, um, Strong here.

Very strong through the next week plus.

And then, you know, let's see what weather does.

But there's also supply side issues.

Indonesia is having issues getting coal out.

The biggest coal province in Indonesia, Kalimantan, is having issues barging coal to market.

And this is the province that produces more than 80 percent of coal.

Indonesia's coal and almost all that coal, virtually all of that coal runs down rivers to loading docks into the ocean-going vessels.

And river levels are down.

30% have been down over 30% in the last couple of weeks.