Did the doubters declare the death of thermal coal too soon? Certainly the major listed Australian thermal coal miners have all seen positive movement in their share price from late 2017 through into 2018, bucking the wider perception of a market in decline.
That was in turn driven by a resurgent thermal coal price after its massive bust three years ago. From August 2015 to August 2016, prices languished below $US60 ($75) a tonne. By October of last year that had spiked to more than $US100 a tonne in October 2016 and remained in a healthy range rarely falling below $US80 a tonne.
There are combination of international and domestic market factors as well as smarter play by Australian miners that have created market conditions where thermal coal has regained ground, shaking off the zombie company taglines that have dogged the industry over the last year.
The domestic market is also different. Australia has significantly fewer thermal coal miners today than it did five years after a spate of sell-offs, divestments, and exits from the market, and now those who survived are reaping the benefits of a strengthening market. But can it keep up the pace of recent months, or will this run peter out?
Whitehaven Coal has been one of the standout performers. In February of 2016 Whitehaven’s share price hit 37 cents. Earlier this month it hit $4.77 only slowing down on the back of lowered production guidance figures last week.
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