Indonesia, the world's largest exporter of coal, set to curtail supplies

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• The Chairman of the Indonesia Coal Mining Association said Tuesday, "there is potential for a disruption like what happened in January...we just assume they’re going to stop exports again" according to Bloomberg.
• Restrictions on overseas thermal coal sales would ensure local power plants have sufficient supplies, but would exacerbate global shortages.
• The news comes as benchmark thermal coal prices around the world sit at record levels:
• Indonesia, which accounts for ~40% of the global seaborne thermal coal market, sent a shockwave through energy markets earlier this year, when the Country announced a temporary halt to exports in January.
• US producers of thermal coal sell a majority of their volumes to domestic utilities at contract prices; however, names like Peabody (NYSE:BTU) and CONSOL (NYSE:CEIX) sell a portion of volume on the seaborne market and are likely to benefit from sustained higher prices on the back of Indonesian curtailments.

Comments

[Sam DNA]

$400 COAL?
Don't worry, BTU hqtrs is real smart.
They hedged plenty of coal last year at $86.

[drop23]

@Sam DNA A coal company cannot survive relying on spot market sales

[SPC2]

@Sam DNA Actually, they were very smart in that they left ~7M tons (plus whatever they can produce above that) unhedged and will be printing cash for the foreseeable future.

[wallacemwimmer]

@SPC2 Very long CEIX. Low cost production with Pennsylvania longways in very high quality coal seam. New Met Coal mine coming online in world famous Pocahontas #3 seam southern West Virginia. Baltimore MD expo facilities veteran management team….VERY LONG CEIX

[Nudossi73]

That's all good news for South Africa's coal company Thungela Resources (TNGRF) and Exxaro Resources (EXXAF), both good stockholder-friendly companies with high dividends.

[Concernedabout]

manipulation again

[Joeri van der Sman]

Glencore seems mispriced to me

[OverTheHorizon]

@Joeri van der Sman what’s the difference between CLCNF GLNCY?

[Joeri van der Sman]

@OverTheHorizon I don't know, main listing is in londen.