In this episode, Joe and I try to unpack the chaos surrounding newly announced U.S. import tariffs and what they might mean for the coal sector. With a barrage of policy news and a spike in market volatility, we start to dig into how effects on mining costs might vary across markets (met vs thermal), mine types (surface vs underground), equipment (draglines/shovels vs longwalls/continuous miners), and geography (Central vs Southern Appalachia, etc). We also explore how U.S. producers might be pushed up the global cost curve, while comparatively unaffected Australian companies (ie Whitehaven, Yancoal, New Hope, etc.) might benefit.
The conversation also turns to balance sheets, access to capital, and the likely winners and losers in both the export and domestic coal markets if these tariffs were to stick. With futures markets somewhat detached from physical spot prices (at least in met coal) sentiment shaky across global equities, and policy uncertainty being a feature rather than a bug of this approach to global trade, the truth is just that nobody knows for sure how the path will evolve in the near term. But, analysts WILL eventually be able to outline plausible scenarios once market participants either get some clarity on how trade tensions will resolve, or some feedback from operators on how they plan to weather the storm.
I expect we will do more episodes like this as the dust settles—or keeps swirling!
-MW
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