The market for metallurgical coal in the United States is increasing predominantly because it is required for steel production.
The following table indicates some key reasons as to why the price of steel is increasing.
With the positives around steel it is hardly surprising we are getting coal companies announcements such as:
- Contura Energy are in the middle of a $162m IPO (see here).
- Warrior Coal have record income of $129.9m in Q2 2017. Warrior’s highly successful second quarter validates their value proposition as the only publicly traded ‘pure-play’ hard coking (metallurgical) coal operator in the U.S. (see here).
U.S Coal global research firm IHS Markit also pointed out that metallurgical coal revival isn’t just dependant on Trump infrastructure projects.
Probably the single biggest driver of the surge in exports is that there is international demand for U.S. metallurgical coal right now. “That is a function of the market rather than the political environment.”
Regency Mining are well placed when production commences to deliver much needed metallurgical coal.
It would appear the recent RGM RNS indicating coal projects are not now going to be progressed piecemeal but the ‘big picture’ route taken is based on some solid foundations..