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Warrior Met Coal: Facing Near-Term Pricing And Labor Challenges

May 04, 2021 3:52 PM ETWarrior Met Coal, Inc. (HCC)5 Comments


  • Warrior mainly sells its coal based on Premium Low Vol FOB Australia prices, which have been hampered by deteriorating relations between China and Australia.
  • Warrior is also dealing with dwindling inventory due to the mining strike, which would force it to focus on fulfilling its contracts over spot sales.
  • Thus Warrior is likely to have some cash burn in 2021, although its overall financial position remains healthy.
  • A new labor contract could potentially push its cost of sales up a bit.
  • Warrior is roughly fairly valued for a long-term realized price of $120 per short ton.
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Natural black coals for background,It can be used as a fuel for coal industry
Photo by joruba/iStock via Getty Images

Warrior Met Coal (NYSE:HCC) is facing some near-term challenges with the continuing weakness in Premium Low Vol FOB Australia met coal prices and the potential to start running out of inventory if the

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Elephant Analytics has 15 years of analytical experience and unique skills in numerical analysis and practical mathematics. He is currently ranked in the top 2% of analysts by TipRanks.
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Comments (5)

Mellowphant profile picture
The company is still holding out, they’re even still pushing to cut vacation days. Some of the guys still speak of hope for more money, but they’re practically starving during this strike. Unfortunately for the workers, there are many that will do anything just to end the strike and the company knows this. Most of these guys don’t understand the union or their own power. I’ve even heard some ask “Why won’t the union just end the strike so we can go back to work?” as if this is something the union is doing to them. I fully expect the company to win this bout.
Rodney Beasley profile picture
@Mellowphant have heard the company hasn’t budged one bit on offer. Feels like they trying to bust the union. Talked w an analysts today which made a call and said it appears that way. Can they get away from the union even? I know Kentucky did or back in 2015 there was almost no union miners is my understanding.
2tired2talk profile picture
With steel demand and prices as high as they are currently, what are the odds that met coal prices exceed $120/mt in the next twelve months?
TBeardHawk profile picture
Good analysis. Thank you. Curious why you use 5.5x Edbita. Not a growth company, but still seems a bit low.
bengalesq profile picture
Nice quick read. Knew about the overhanging issues but quick way to flesh it out a bit.
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