“In an executive order Trump is set to sign Tuesday afternoon, the president will direct a number of steps by the federal government meant to reinvigorate coal said a senior White House official. The actions including emphasizing the US is back in the business of selling coal mining rights on federal land and ordering the rock be designated as a critical mineral. Other steps include accelerating the export of US coal and related technologies.”
(2)
Will the coal trader rename itself to “BeautifulCleanCoalTrader” as Trump directs us to do in his speech (see link above)
I wrote a bit about the Executive Order in thecoaltrader chat earlier today (just after Trump’s 3 pm announcement) you should check that out! It’s my first take on the EO, will post more later as I digest it further
Vietnam imports mostly thermal coal and gets it mainly from Australia and Indonesia, with some Russian supplies in the mix too. I don't know of Vietnam taking any US coal, but if they did, it would have been a nominal amount. Shipping distances do matter in the global coal market, so proximity to supply plays a role. But if there's a need to ship US cargoes to Vietnam, it could be done. It's just going to add costs as those cargoes from the US will be traveling farther (more diesel labor etc.). Plus the longer haul route ties up capacity in the dry bulk sector and would tend to push up freight rates. So again, this can all be done, but it's less efficient than the current trade flows.
But, too your point of commodities balancing trade: the US is definitely seeking to send more LNG to Vietnam...that's a more fungible product and Vietnam actively wants to increase LNG imports by a lot. More LNG exports could help with the balance of trade...Trump already trying to push more US LNG to key countries...
👍🏻 I don’t think most people appreciate how much more LNG costs than coal. Thermal coal probably sells for the equivalent of $4/MMBtu while LNG is $13+/MMBtu (not accounting for the fact that gas plants are a bit more efficient and require less O&M than coal, but those are relatively small things compared to the price delta).
The point is Trump is putting a penalty using tariffs if a country does not balance.
So when the choice is between a trade inbalance resulting in tariff costs or some extra shipping cost because they get their coal (or gas) from the US, they will simply buy from the US instead of Indonesia.
And to proof my point, look no further than his latest statement while threatening China with an extra 50%, he explicitly mentions countries can buy US energy.
LNG is indeed part of that basket but coal burning is cheaper. Europe likely will buy the LNG since they are so vested in the green boondoggle. Poorer countries however will jump to buying coal IMHO
China can reduce it’s trade inbalance headache by simply buying more US energy products instead from Indonesia or the middle east. All it takes is a call from central committee to it’s party-member traders. Will be interesting to see if their pride and arrogance will block them acting.
We are seeing many countries coming forward to aid balancing trade so the tariffs can go to 0
For a country like Vietnam, they can do that by simply buying energy commodities from the US instead of some 3rd country. Since it’s commodities, prices will be about the same. And if they buy more then they need, they can resell the commodities to others
If the commodity is coal, they can resell to China and whoever buys it in China now does not have the 34% tariff since purchase was from a friendly communist neighbor.
Obviously, same can be done with oil and by other countries that want to balance their trade.
But IMHO commodities are the easiest to balance trade, especially if the commodity is something without storage cost and you can use yourself . You may buy wheat but it can go bad. Or go boom if it was nat gas.
Thanks guys. Matt, may I ask for your model for HCC - it seems you were assuming $155 met coal price for 2027 when Blue Creek comes online? What would those FCF be if prices are higher (say 250) or lower? As is often the case, I found the a point estimate for FCF is less useful if prices are unsustainably high or unsustainably low. HCC looked like 30% FCF yield in 2023 but we all knew (with hindsight) that those numbers were irrelevant because it was sustainable. Would be great to know your assumptions for the model you showed in today’s podcast if possible. Thanks a lot!
Which medication do you recommend to calm down anxiety until nextt coal therapy session? Dont tell me charcoal, for not even loperamid was enough during todays markets play....😇
Enjoyed it. My coal portfolio is almost entirely Aussie and Kiwi coal, and whilst I don't yet have a sizeable YAL position, biggest concern I have is that YAL does something stupid instead of paying out nice juicy divvys. Do you see YAL as a proxy for the CCP as it's controlling shareholder is Yankuang Energy Group Company Limited, which is an arm of the party. Perhaps it's a double edged sword - reliable sales pipeline with the risk they do another acquisition?
Side not, Oz coal might also benefit with cheaper parts if China needs to offload excess inventory. Time will tell.
The problem with YAL is that CCP ownership will *always* prioritize China’s national interests over ours as public shareholders. They’ll always acquire some long-life asset to provide coal to China in the 2040’s over making us happy and throwing us some cash. It’s hard enough to make $ in the market when the incentives are aligned, let alone when the major stakeholders in a company have wildly different motivations.
So far YAL has been great…well aware of the ownership but so far just acting like a coal miner. Probably ownership just wants to get paid like the rest of us.
Will they acquire something? Maybe…Kestrel seemed to die a death, but BTU merger still pending and they need to sell something if they want to do the deal.
What is the current situation with the Thungela and what are your expectations for the future?
For all our navel gazing trying to predict the future, welcome news like this should bring some clarity.
Apart from the very justified bourbon later today, comments and impact analysis?
https://www.thegatewaypundit.com/2025/04/watch-live-president-trump-sign-unleashing-american-energy/
“In an executive order Trump is set to sign Tuesday afternoon, the president will direct a number of steps by the federal government meant to reinvigorate coal said a senior White House official. The actions including emphasizing the US is back in the business of selling coal mining rights on federal land and ordering the rock be designated as a critical mineral. Other steps include accelerating the export of US coal and related technologies.”
(2)
Will the coal trader rename itself to “BeautifulCleanCoalTrader” as Trump directs us to do in his speech (see link above)
I wrote a bit about the Executive Order in thecoaltrader chat earlier today (just after Trump’s 3 pm announcement) you should check that out! It’s my first take on the EO, will post more later as I digest it further
Vietnam imports mostly thermal coal and gets it mainly from Australia and Indonesia, with some Russian supplies in the mix too. I don't know of Vietnam taking any US coal, but if they did, it would have been a nominal amount. Shipping distances do matter in the global coal market, so proximity to supply plays a role. But if there's a need to ship US cargoes to Vietnam, it could be done. It's just going to add costs as those cargoes from the US will be traveling farther (more diesel labor etc.). Plus the longer haul route ties up capacity in the dry bulk sector and would tend to push up freight rates. So again, this can all be done, but it's less efficient than the current trade flows.
But, too your point of commodities balancing trade: the US is definitely seeking to send more LNG to Vietnam...that's a more fungible product and Vietnam actively wants to increase LNG imports by a lot. More LNG exports could help with the balance of trade...Trump already trying to push more US LNG to key countries...
👍🏻 I don’t think most people appreciate how much more LNG costs than coal. Thermal coal probably sells for the equivalent of $4/MMBtu while LNG is $13+/MMBtu (not accounting for the fact that gas plants are a bit more efficient and require less O&M than coal, but those are relatively small things compared to the price delta).
The point is Trump is putting a penalty using tariffs if a country does not balance.
So when the choice is between a trade inbalance resulting in tariff costs or some extra shipping cost because they get their coal (or gas) from the US, they will simply buy from the US instead of Indonesia.
And to proof my point, look no further than his latest statement while threatening China with an extra 50%, he explicitly mentions countries can buy US energy.
LNG is indeed part of that basket but coal burning is cheaper. Europe likely will buy the LNG since they are so vested in the green boondoggle. Poorer countries however will jump to buying coal IMHO
China can reduce it’s trade inbalance headache by simply buying more US energy products instead from Indonesia or the middle east. All it takes is a call from central committee to it’s party-member traders. Will be interesting to see if their pride and arrogance will block them acting.
Where does Vietnam gets it’s coal from?
We are seeing many countries coming forward to aid balancing trade so the tariffs can go to 0
For a country like Vietnam, they can do that by simply buying energy commodities from the US instead of some 3rd country. Since it’s commodities, prices will be about the same. And if they buy more then they need, they can resell the commodities to others
If the commodity is coal, they can resell to China and whoever buys it in China now does not have the 34% tariff since purchase was from a friendly communist neighbor.
Obviously, same can be done with oil and by other countries that want to balance their trade.
But IMHO commodities are the easiest to balance trade, especially if the commodity is something without storage cost and you can use yourself . You may buy wheat but it can go bad. Or go boom if it was nat gas.
What about blackhawks met assets?
Thanks guys. Matt, may I ask for your model for HCC - it seems you were assuming $155 met coal price for 2027 when Blue Creek comes online? What would those FCF be if prices are higher (say 250) or lower? As is often the case, I found the a point estimate for FCF is less useful if prices are unsustainably high or unsustainably low. HCC looked like 30% FCF yield in 2023 but we all knew (with hindsight) that those numbers were irrelevant because it was sustainable. Would be great to know your assumptions for the model you showed in today’s podcast if possible. Thanks a lot!
Sorry I meant “those numbers were irrelevant because it was *not sustainable”.
Which medication do you recommend to calm down anxiety until nextt coal therapy session? Dont tell me charcoal, for not even loperamid was enough during todays markets play....😇
It’s bourbon here! 🥃😵💫🤕
Enjoyed it. My coal portfolio is almost entirely Aussie and Kiwi coal, and whilst I don't yet have a sizeable YAL position, biggest concern I have is that YAL does something stupid instead of paying out nice juicy divvys. Do you see YAL as a proxy for the CCP as it's controlling shareholder is Yankuang Energy Group Company Limited, which is an arm of the party. Perhaps it's a double edged sword - reliable sales pipeline with the risk they do another acquisition?
Side not, Oz coal might also benefit with cheaper parts if China needs to offload excess inventory. Time will tell.
The problem with YAL is that CCP ownership will *always* prioritize China’s national interests over ours as public shareholders. They’ll always acquire some long-life asset to provide coal to China in the 2040’s over making us happy and throwing us some cash. It’s hard enough to make $ in the market when the incentives are aligned, let alone when the major stakeholders in a company have wildly different motivations.
So far YAL has been great…well aware of the ownership but so far just acting like a coal miner. Probably ownership just wants to get paid like the rest of us.
Will they acquire something? Maybe…Kestrel seemed to die a death, but BTU merger still pending and they need to sell something if they want to do the deal.
When you accept that the Chinese are capitalists and smart corrupters, it is easier to understand
Yal will continue to be one of their preferred coal supplier because of their ownership.
The earnings will flow back through dividend payments . It’s like the Treasury and the Fed.
Only now some are also able to skim to themselves through various intermediaries as well.
Questions for our next group therapy session:
1) China’s excess steel was a big problem… wouldn’t some level of protectionism be bullish?
2) What’s the risk of NRP’s operators tanking? AMR is safe, as we all know, but how about the privates?
Thanks guys!
1) For domestic business yes, for export business no.
2) A few operators at risk, but mostly they are tied to quality assets.