{"id":3156,"date":"2023-12-13T18:10:13","date_gmt":"2023-12-13T18:10:13","guid":{"rendered":"https:\/\/economicherald.net\/?p=3156"},"modified":"2023-12-13T18:10:13","modified_gmt":"2023-12-13T18:10:13","slug":"lithium-and-rare-earths-shtcos-get-the-love-but-coal-investors-get-the-returns","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=3156","title":{"rendered":"Lithium and rare earths sh!tcos get the love, but coal investors get the returns"},"content":{"rendered":"

IEA predicts appetite for oil, coal and gas investments has peaked, but IEA forecasts are historically bad
\nCoal equities have been top performers in every commodity bull market since 1900
\nThe pattern continues to repeat itself: Goehring & Rozencwajg
\nSince June 2020, coal equities have advanced almost 2,000%<\/p>\n

\u00a0<\/p>\n

The appetite for oil, gas, and coal investments has supposedly peaked, according to the gloomy World Energy Outlook 2023 released by the IEA (International Energy Agency).<\/p>\n

The new kings \u2013 renewables \u2013 are expected to be crowned before this decade ends.<\/p>\n

So why invest in fossil fuels, a sector with such a dismal outlook?<\/p>\n

Because demand continues to confound the experts.<\/p>\n

Oil, for example. Veteran resources investors Leigh Goehring and Adam Rozencwajg say the IEA has chronically underestimated global oil demand in 12 of the 14 years (including COVID-impacted 2020) since 2010.<\/p>\n

\u201cExcluding 2020, the IEA increased demand by an incredible 800,000 b\/d on average from its initial expectation,\u201d Goehring & Rozencwajg say in their third quarter market commentary.<\/p>\n

\u201cIf the IEA\u2019s error were a country, it would be the world\u2019s 21st largest oil consumer.\u201d<\/p>\n

Here\u2019s another remarkable fact.<\/p>\n

From trough to peak, coal equities have been the best-performing sector in every commodity bull market since 1900, Goehring & Rozencwajg say.<\/p>\n

This pattern still seems to be repeating itself, despite the sector-specific headwinds coal companies and their investors contend with.<\/p>\n

No industry has been more capital-starved and socially hated than global coal over the past decade, both thermal and metallurgical.<\/p>\n

This underinvestment has impacted supply, especially in the thermal space.<\/p>\n

Met coal time will come, as \u201crising steel requirements in Asia \u2026 drive investment in more risky deposits, adding to potential volatility and market uncertainty,\u201d the latest Resources & Energy Quarterly says.<\/p>\n

It\u2019s no wonder there\u2019s a dearth of coal equities on the ASX, despite Australia\u2019s reputation as the biggest met coal (52%) and second biggest thermal coal (17%) exporter in the world.<\/p>\n

Goehring & Rozencwajg say demand continues to confound sceptics by displaying unexpected strength.<\/p>\n

\u201cCoal-related equities literally [not literally] \u2018caught fire\u2019 in the third quarter,\u201d they say.<\/p>\n

\u201cThe S&P 1500 Coal & Consumable Fuel Index surged 55%, the best-performing commodity-related equity group.<\/p>\n

\u201cFor those unencumbered by ESG pressures, we continue to recommend coal equity exposure.\u201d<\/p>\n

Since June 2020, coal equities have advanced almost 2,000%, Goehring & Rozencwajg say.<\/p>\n

That trounces the 110% return of the S&P North American Natural Resource stock index, the 70% return of the S&P Global Natural Resources stock index, and the 46% return of the S&P 500.<\/p>\n

While Aussie miners have struggled to post 2022-type gains in 2023, they are cashed up and pay dividends.<\/p>\n

Stanmore Coal will pay out upwards of US$50 million to shareholders after the cashed-up #coal<\/a> miner missed out in a major BHP mine sale. #ASX<\/a> $SMR<\/a> https:\/\/t.co\/IWrgIXIJwI<\/a><\/p>\n

\u2014 Stockhead (@StockheadAU) November 29, 2023<\/a><\/p>\n\n

Lithium and rare earths shitcos may get the love, but coal investors get the returns.<\/p>\n

\u00a0<\/p>\n

ASX coal stocks<\/strong><\/h2>\n

Scroll or swipe to reveal table. Click headings to sort.<\/em><\/p>\n

<\/div>\n
CODE COMPANY WEEK MONTH SIX MONTH 12 MONTH PRICE MARKET CAP YAL Yancoal 1% 4% 4% -15% 4.9 $6,470,153,241 WHC Whitehaven Coal 4% 7% 15% -23% 7.35 $6,040,257,660 NHC New Hope Corporation 1% -3% -6% -11% 5.08 $4,285,850,802 SMR Stanmore Resources 0% 4% 42% 52% 3.82 $3,398,246,460 CRN Coronado Global Resources -2% 10% 23% -11% 1.705 $2,891,882,684 DBI Dalrymple Bay 0% -3% 2% 14% 2.68 $1,328,641,268 TER Terracom 1% 13% -24% -57% 0.355 $296,357,507 BCB Bowen Coal -4% -2% -42% -66% 0.093 $273,012,173 BRL Bathurst Resources -1% -3% 8% 9% 0.95 $181,791,791 CKA Cokal 0% 20% 4% -38% 0.12 $129,473,878 TIG Tigers Realm Coal 0% 0% -29% -67% 0.005 $65,333,512 MCM Mc Mining 0% -15% 4% -42% 0.14 $57,104,704 AQC Australian Pacific Coal -4% -15% -9% -44% 0.115 $52,442,662 AKM Aspire Mining 5% 63% 57% 22% 0.096 $48,733,151 JAL Jameson Resources 0% 13% -36% -63% 0.045 $17,618,000 ATU Atrum Coal 0% 0% 0% -17% 0.005 $6,958,496 <\/div>\n

WordPress Tables Plugin<\/a>
\n<\/span><\/p>\n

The post Lithium and rare earths sh!tcos get the love, but coal investors get the returns<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

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