Barron's Live Coal, Metals, Mining? We Need to Talk
Sep 30, 2024
James Stevenson, Executive Director of Coal, Metals & Mining at McCloskey by OPIS, dives into the dynamic world of energy commodities. He highlights record coal production in 2023, especially in the Asia Pacific, and discusses the resilience of coal amidst the transition to renewables. Listeners learn about the strategic implications of potential U.S. Steel acquisitions, the revival of nuclear energy for decarbonization, and the rising demand for copper and lithium, propelled by technology and renewable energy investments.
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Coal's Unexpected Resilience
- Coal production, consumption, and trade hit record highs in 2023, despite decarbonization efforts.
- Asia-Pacific drives coal demand due to limited natural gas alternatives and reliability concerns.
Investing in Coal
- Coal investments are becoming more acceptable due to its role in steel production for renewable energy infrastructure.
- Companies like Alpha Natural Resources and Warrior Met Coal are examples of coal equities that have seen significant price swings.
Future of Metallurgical Coal
- The metallurgical coal market is currently oversupplied, but a structural shortage is projected in the next ten years.
- This is due to long lead times (8-10 years) for new coal mine development.