Episode 13: The Hormuz Hedge - Geopolitics Jolt the Coal Markets

This is the Coaltrader Podcast on the Clear Commodity Network, your source for trading and investing in the coal market. Hey, Coaltraders and welcome to episode 13 of the Coaltrader Podcast. I'm Matt Warder, your host with me as always is my partner, Joe Aldina. Joe, how you doing, buddy? Hey, Matt. Pretty good. You know, not too much happened in this week. Nothing in the news. You know, I'm just great. Nothing in the news? Are you sure? I've been watching the straight of hormones like everybody else pretty much minute by minute to try to understand what's going on here. Obviously, it's been very good for the thermal coal prices and thermal coal stocks, you know, and the hybrid miners that have thermal coal exposure have cargo to sell. So yeah, that's been, that has been fun. I am definitely being facetious. There was a lot to do this week. There was. And to that end, we do have some questions from folks. I'm pretty sure we're not going to be able to get to everything because this is just a rat's nest of news and pin action on the stocks themselves, pin action on the commodities. So with that, I think let's, let's go ahead and jump in. Let me run through the thermal coal futures and I'll pass it off to you, Joe. You know, folks had some questions about how much Met coal moves through the straight of four moves. The answer is not a lot. You know, it's not that big of a trade route for it. So as a result, this is really going to be a Joe Aldina enhanced podcast, I fear. So just taking a look down thermal coal futures, Newcastle spot is sitting at about 135 next month at 137. The curve is sitting right at 138, 139. That's not up a whole lot over the last week, just about 2%. But over the last month, that's, you know, 15 to 17% gain, depending on where you are in the curve. Newcastle and API 2 both taking a step back today, but API 2, European prices, sitting at 122 to 128 on the forward year curve. That's up as much as 22, 23% over the past month. Richard's Bay also pulled back today, but it's sitting right around 110, 109, 112, up about 13% on the month. Indonesia with the export band that they have on continues to just gradually climb north, 4200 K-Cal settling at 56, 54 today, up 12% over the past month. But really, the story is Iran and the retaliation in the, you know, in the Middle East and Hormuz and with that Joe, I guess just fill us in on how that's affecting gas markets and thermal coal markets and we'll take it from there. Yeah, thanks for the price run, Dan Matt. I mean, you know, we saw was the thermal coal prices really spiked on Monday and so they've come down a little bit over the week. But, you know, from, as you pointed out, much higher levels earlier in the month. So, you know, the headlines could be misleading. I'm looking at the chart here for, for Rotterdam coal and it's down on the week, but still very healthy prices. And yeah, this is, Hormuz is a gas and oil story. There are a few coal cargos that go in and out of there, but I would be, you know, I can't really think of where they, where they move or the, it's such small volumes. I wouldn't really pay attention to it, but there are real knock on effects of having high gas prices and from the closure of the state of Hormuz. And, you know, the big question is how long the disruption lasts and, you know, I was talking with somebody earlier today who's watching this very closely. I think it's going to be measured in months rather than the next couple of weeks. I mean, Qatar has come out and said that it'll take them a month to restart their LNG plant. One of, if not the biggest LNG plants in the world, Roslophane. You know, it takes a couple of weeks just to, if the US Navy was able to get in the straight and demine it or mine sweep it, you know, that takes one to two weeks. So, and, you know, the fighting hasn't stopped. And this is really the one biggest weapon that Iran has is economic disruption. So it's really tough to call, but my gut says we've got a few more weeks or a couple of months more of this rather than just, you know, a two week problem. And a lot of these curves that the oil curve was really steeply backwardated. A lot of people think this is a very temporary blockage of the straight-of-hormuz. And, you know, I just err on being a little bit bullish on that bullish that the straight stays close and prices for commodities stay high. You know, that's a very tough call, but that's where I sit. And yeah, so like I said, the fundamental, fundamentally coal is benefiting. You've got the LNG prices and gas prices at really high levels. TTF in Europe, 51 euro per megawatt hour. That's about $17 per million BTO, April, JKM, futures around 16, and then May and June above $18 per million BTO. So at $18 per million BTO gas, if you've got a, if you're an agent, you know, you're going to be an agent, you're importing LNG. I mean, it's just not workable. So you're going to, you're going to move to coal. And we saw Taiwan talk about restarting a major coal plant. We saw Bangladesh on the bid for Indonesian spot cargos of coal to replace high priced LNG. We have China talking about running more coal. We have India talking about running more coal. And there is more coal capacity to run in China and India. So, you know, short term, everything's still quite, quite bullish. And you know, this is not just trading on momentum. There's fundamental tightening happening in the thermal coal space. And you know, I know you've got the stocks in front of you, Matt. You know, it's doing a nice rundown. But we kind of said, I kind of called that Yan coal as being one of the best names to play this theme with. And you know, it's up a lot. You can tell me how much I, we had a reader say, hey, isn't that a guy? And CNR going to benefit. Yep, they've got some spare cargos to export. And you know, they're trading on a little more momentum than actual exports, I think, at the moment. I know you trimmed your CNR now that we're up here at 100. But yeah, stocks are, so the coal equity is there frothy, but I don't see Hormuz. I don't see Hormuz going away. But then as we talked about, you know, you're in shoulder season for coal demand. So, you got to weigh all those factors, I think, if you're listening. Yeah, those are two really conflicting factors. I mean, just to put the gas move in context, TTF is up 56% since March the second and JKM on the Pacific is up 67% since March the second. So these are huge moves that honestly have not been fully reflected in thermal coal prices if you don't mind me saying so. Yeah, that's absolutely true. That's absolutely true. And like if you're saying we get, you know, a couple of more months of this, then that's going to bleed over into well into Q2. So we should have some really good performances to the extent that anybody has spot availability. Yeah, absolutely. That's key. And you know, it's just key to, I like playing the more liquid names. We had readers talking about TerraCom and Thonghella. I mean, Thonghella has been a very good performer, but I might look at playing this with options. I would definitely set tight stop losses, you know, by so I think there could be some more juice in these names. Definitely, you know, on an energy adjusted basis, coal is still cheap. And, you know, there was a, I can't remember which consultants put it out. They said, thermal could hit on an energy adjusted basis, $250 per metric ton, you know, to compete with where Ellen G goes if Ellen G is above $20 per million B2 in a scenario where the straight remains closed for a couple months. You know, that's not, that's not out of question. I think that's the upper end of plausibility as a friend of ours said privately not too long ago. Yeah, if Thermal Co hits 250, I will eat a kangaroo steak. Sure. I, you know, I don't, that's not the base case. That's, that's on energy adjusted if it went that high. But, you know, there could be a lot of, a lot of coal to burn. People talk about coal to gas switching in Asia pack happening when Ellen G prices are like $67 per million B2U. So that's kind of, you know, you're, say you're, those are your fueling costs for coal imported coal. And now you got $18 per million B2U Ellen G. So there's quite a spread there. If you can burn coal, you're going to want to do it places like Bangladesh, they can't really afford the Ellen G that they buy. They subsidize this. A lot of the emerging market Ellen G buyers are paying, they're paying a lot to import the Ellen G. And then they're selling it to power producers and dustrieels, residential customers for less than they buy it for. So there's a government subsidy involved. And, you know, so if it was expensive to buy Ellen G before now, you know, it's becoming unaffordable. And, you know, that difference of $10 per million B2U for your fuel costs is absolutely huge. So if you can get spot cartos of coal in and you've got coal plant capacity, you're going to run coal. I'm Egyptian Bangladesh, Thailand, Taiwan. on talking about it, India, China, a lot of that pulls on South Africa, Indonesian coal on in terms of where they look for cargos. You know, US will be called on. Basically, this is an all hands on deck moment for short term coal cargos. So, you know, exciting and interesting week. And yeah, it's always fun when 67% rise in JKM. That's a, I think that's called face ripping. I don't know if you were short to JKM into the Iran War, you know, longer have a face. I'm pretty short. Yeah, and some of these, you know, some of these funds were positioned kind of short on oil and gas. It looked like oil was very loose. The oil market was very loose. Gas market was, you know, headed towards a little bit of oversupply. I mean, maybe in a couple years, but, you know, not super tight. Nobody was super worried and then, you know, the picture has totally changed, especially for gas. Sure. Yeah. Well, I had in one thing, the only real situation that could, you know, maybe loosen the thermal coal market a little bit aside from, you know, extreme, extremely mild weather. Low-volpe PCI is trading at about 158 to 160 dollars right now. And the new castle coal is at 135. So you can't burn a whole lot of low-vol coal in a thermal coal boiler, but you can't burn a little bit. And certainly, semi-soft, which is trading down around 141. If we actually get up to see, you know, 138, 140 on new castle, we're going to see some semi-soft move over into that market 100%. Yeah. I, you know, that's a good thing to bring up. I actually had been reading right before the podcast that some Australian miners were talking about some interest in their semi-soft and PCI to head into the thermal market here in the short term. Yeah. I totally agree with you. That's right. We're not, uh, USC's Coast Hyval B is still trading at 147.60 per metric ton. Uh, that is not in the money relative to, uh, relative to API 2 at 122. But, you know, again, if this really does persist as you're talking about, we are going to have this tension throughout the next couple of months. Uh, we could see, uh, you know, a bid catch on the Hyval side. On the kind of lower quality in that side. Yeah. That would be helpful. Um, on the thermal side, there's one other thing just on the supply side is that Russia is having some issues, uh, getting coal out on the, the eastern side of the country. They're having some rail issues. They had, uh, I believe a train derailments, a couple trained, derailments, maybe in February. And so those far Eastern ports are having trouble moving coal right at the, right at the wrong time. So, you know, that balances out maybe the impacts of semi-soft and PCI crossing over from that into thermal markets. But yeah, good news for your, your Hyval guys met, but it may not be a, a salve to the, the high thermal coal prices. You know, we'll see. There's some offsetting factors there. Yeah, that's right. Well, let's, uh, let's take a rundown of the equities real quickly. Well, before that, I'll just do Met coal futures real quick where, uh, we're about 7% for the month of the curve, the forward curve hit $250 today, which is a sea change from where we were, you know, a year ago or even when we started the podcast, uh, you know, back in, what was it September ish? That is, I think about 20, 25% higher than, uh, you know, a year ago today, the forward curve was sitting at 200 bucks. Now it's a 250, uh, spots at 220 to 225, um, depending on which, which metric you go by and then, uh, and even the dolly on contract has been catching a bit. The second month is about, up about 15% on the month. So, you know, China's starting to catch a bit on the cooking coal side. The broader market is catching a bit. If we actually see some of this lower quality material follow suit, it could, you know, kind of make for a pretty mild shoulder season where I would say downside in that scenario is probably only about 200 bucks. It's hard to see it getting much below that with all this tension kind of going on. In the market. So the equities, let's see, AMR down 1.4% as we speak, but it's up, you know, 11% over the past week, kind of flat on the month for your Met cold trading at 8450, uh, also up about 10% on the week. Ramaco down in the 1440s, it went up bananas last week and then sort of has come back down up 3% on the week. But the real story has been core natural resources up 12% in the past week. And then down under Yan Cole, up 27% in the past week, 32% over the past month and 62% year to date, which is great to see, but it is starting to creep up into, I mean, it's in full on breakout mode. Yeah, these are, these are a little frothy prices, you know, as we were talking about before the call, you know, I don't want to be short here, but be cautious out there. Stay frosty. That's right. It's really volatile, but you know, Yan Cole, the next technical level of resistance is like, there's like a little one up at 860 and then you're up to, you know, the 2016 highs of 1185, uh, Australian. So there's not much room, but blue sky above it from a technical basis. So, you know, if the retail guys in the, in the MoMo chasers, you know, really glom on through it as it appears that they have, yeah, we might not be done just yet. So, you know, my, my preference is to, especially when you get a two standard deviation move, you know, relative to the past, you know, 30 to 60 trading days is to take some off, you know, sacrifice to the market gods, is it, or generally when I don't do that bad things happen. So, but that said, you know, the way to make money in these, in these markets is to ride your winners and both Yan Cole and White Haven up 10% in the past week have been really just screaming great. New hope up 13% in the past month. Tericom has been moving around. Thungella has been moving around, but both of those up 37 and 41% in the past month up about 5 to 6% on the week. So everybody's getting into the act, yeah, everybody that's those are that's that's everybody when those guys are in the action. Yeah, exactly. And this is a period of the market where thermal is going to be better than that. I feel pretty confident saying that until this until either we see some crossover or alternatively, you know, we see some kind of resolution on the thermal side. Yeah, or we see, you know, crossover tends start to make make their way over. So there's a lot of potential outcomes and it's really difficult to try to triangulate exactly how this is going to work out. I mean, we're sending troops over there right now. That should be two weeks till, you know, potential ground troops arrive, which is pretty pretty jarring to say on a podcast. But you know, it doesn't look like we're deescalating anytime soon. You know better than I, though. Yeah, I mean, did I did I say this on on sub stack? I can't remember. I thought how I did. I, you know, I said it in my personal sub stack feed that look, we could take the administrative or moves, but it's going to require more military intervention. It might even require a ground troop. So I said that like a week ago, based on no military knowledge whatsoever, but based on commentary from a friend of mine who does have military expertise. And yeah, no, that's it. It's a sobering sobering comment. You know, I just I worry where things could go because again, this is Iran's one big weapon is disrupting the global economy. So that is this that that's going to be job number one for them. And there's a lot of little ways that they can disrupt flows through the trade of four moves. For sure. Well, on that note, we have a ton of questions that we still have leftover from last time, and we have a few new ones for this podcast. 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The dynamics of the natural resource trade changes every day. Get the full view of the commodity markets every week with commodity compass hosted by me, Jennifer Pickerel. From metals to energy to agriculture, we break down the key moves, market drivers, and macro forces shaping the resource world. All in one sharp, insightful podcast from the Clear commodity network. Whether you're a trader, investor, or industry pro, commodity compass helps you stay grounded and informed. on Apple Podcasts, Spotify, or at clearcomodity.net. All right, Matt. Let's get into some of the questions here. We're picking up questions from a couple of weeks ago that we didn't quite get to. The question, one question from Gabboa, who's highly valued reader and is very active on the substack. He asks about the global cost curve. And he said, I think the question is basically, is it sustainable with AMRP body, CNR, making slim margins on their medical businesses? And so, yeah, maybe that's the question is just, where is the global cost curve here and are these slim margins sustainable? It's a good question. The biggest change between last year's cost curve and this year's cost curve is the Australian dollar has appreciated by about 10%. So, any of their costs that they pay in Aussie dollars are 10% more expensive. Labor is a big component of that. Diesel's mostly bought with US dollars, although there are some contracts domestically, I believe. But by and large, Labor is about, call it mining costs in general, about 10% to 15% of total costs and Labor is about half that, so 7%. So, you're talking about a 1% total increase in mining costs just from last year to this year. And then on top of that, you have higher prices. So, the royalty component is gonna be up, that's gonna be another two to three percent. So, whereas, when I ran the model last year, what I was coming up with for the marginal ton is basically about 175. And that's where we kind of leveled out. But BHPs reported, they showed absolutely no profit at their medical mines, which was pretty shocking for me to see. So, in that sense, if BHPs cost have gone up that much, I'd venture to say that the marginal ton is now somewhere between $180 and $190. And if you add in, say, 20% profit on top of that, really we're talking about a long run price of somewhere between 235 and 250, I think it'll wind up being higher than that to be fair. And the curve, at least right now, is kind of reflecting that. But that's where I kind of think the markets at. I'm actually finishing up a global cost curve that we'll publish on the cultrator.com and the cultrator.substack.com here, hopefully by the end of the month, but maybe the beginning of April. - Great. - And, but that's tentatively where I kind of, what I have circled for kind of the bottom of where costs can really go, or prices can really go. - Yeah, so that cost, those cost levels kind of create a price floor, you think, here in the shoulder season. That's, I know some people have like 180 bucks. Maybe that's really the floor, and that's temporary. Is that fair to say? - Yeah, I think so. TuveDex posted FitzRatings forecast, which was down to like 170 to $180 range. FitzRatings doesn't really do forecasts. They pulled that from somewhere. I actually posted most of the banks forecast for Metcole. And they're pretty close to where, I'm tentatively coming in at, which is about call of 225 for Q1. I had 200 for Q2, but it's, I mean, things have changed here in the past couple of weeks that have sort of incline me to push that number up to maybe 210 to 15 as a Q2 average, but then in the back half of the year, even with Centurion coming on, BHP's report were sort of telling us that production is hard. Mine is not getting easier, it's getting more costly. So I would venture to say we'd have, 225, 235 averages, probably when we get to Q3 and Q4. And that's depending on global economy, which Iran can affect a lot, but right now that's kind of where I see it, and to be fair, the banks are pretty much in line with that view as well. - That's kind of a good segue into Rick H's question, which is up next is basically with these, we cost where they are, as you were just saying, from BHP side, very surprising that they're making no money on their Metcule business. Are we seeing any supply response? And then, so cover the Metcule side on that. And then I actually wanna say something about the supply on thermal, 'cause I'll say real quick, that basically Indonesia is having a little bit of a decline in exports. So we're seeing a little supply rationalization out of Indonesia, we're seeing a little out of Russia. Yeah, maybe there's some crossover swing tons into the thermal coal market, but more production coming out of the market at the wrong time than going into it. So, but that's all I wanted to say in the thermal side. So Matt, on the Metcide, any supply responses? - Well, I mean, we know we have a Centurion coming online, and Anglo has signaled to us at least, that we're gonna have a restart of Morinba and Grovener, at some point in time over the next 12 months. So if you just look at that, then yeah, we should have a little bit of supply response. But that said, it's been slow. And I've heard a number of concerns here over the past couple of weeks that have sort of led me to believe that we could see supply, slow, further in Australia even more. And we'll have to wait and see what Centurion's ramp up rate is gonna be. I would figure, at these prices, that'd be pretty anxious to get some coal out of the ground, honestly. But if everybody else is lackluster, and of course there's a potential cyclone off the coast of Queensland as we speak, you know, I guess bottom line is that there are greater chances for additional supply disruption than there are for supply to outperform at this point in time. - Yeah, thanks for that, Matt. There's a good question from Little Trees Capital up next about the strategic outlook for Western coal. I think you know, the, we'll call it X, X Asia coal. Some of the mature coal markets should names consolidate. Is there still a possibility that Glen, GlenCore's coal is spun out? And could they be the, could they be the consolidating vehicle to bring the industry together? And I'll just say from the thermal coal side, you know, yeah, consolidation makes a lot of sense if markets are not growing. And GlenCore has been a consolidator of coal assets in the past, and they've concentrated on high CV thermal coals. And I think that's a really good idea. I think that gives you pricing, a little bit of pricing power, even though it's a commodity market in a space where you might not have growing volumes. And coal can be a viable business for a long time. You know, there's a lot of talk this week on, you know, is you, is, is Katari LNG done? Is US LNG now the best reliable option in the market? Will people rethink their whole energy strategies? I mean, I think the media puts these headlines out all the time and, you know, I would just wait. Let's wait and see what happens. I mean, Matt and I basically have always said, you know, there's going to be a role for coal. I mean, mech coal, do you really need it for thermal coal? Yeah, I mean, every, every couple of years, you have one of these events where it's like, okay, it's good to have some coal around. Maybe we shouldn't shut it all down first before we have, you know, some 12 hour batteries that magically solve our energy system problems. Like, you know, China does this. They keep the coal plants online. They run them less. They give them a capacity payment, but they're there in case there's an energy security emergency. So anyway, that was maybe veering off the topic of consolidation into energy security. But yeah, coal will be around consolidation makes a lot of sense. Yeah, we'll, I mean, we'll Glencold spin out, you know, the former tech assets. I mean, dear eight pound six ounce baby Jesus, please. I'd love to see that. That would be a fantastic investment vehicle to be fair. To have, you know, the Colombian assets and the former tech assets investible as a sole entity would be amazing. And of course, they could be a consolidator, if that, depending on, you know, what the how well capitalized they are when they, when they make a spin out. But is that going to kick off the cycle? I mean, I don't know. Not sure what there is to really acquire. I mean, they're a handful of projects, you know, both the colonial coal is out there. And batter street sources and Jameson resources, Crown Mountain. Both of those are projects I think should be built in the next cycle. The market clearly needs them, but, you know, so far, nobody's really come to the table, so to speak. And, you know, colonial has a kind of chicken and egg problem, you know, if there's not a mind plan because, you know, the plan is to sell the deposit, but, you know, then if a new person comes in and permitting might be an issue. But, you know, both of those are really quality projects that I'd love to see come online here in the next 10 years. But honestly, you know, this is a little bit outside the box, but maybe the consolidation gets kicked off by BHP putting their minds on the block. They're clearly not operating well, they're not prioritizing necessarily. You know, they've already sold two of them to White Haven. It wouldn't be, you know, surprising to me, you know, in five years we look back and go, oh, well, you know, Donnie and Blackwater were basically a trowel run to see if, see a paw in the voice of white Avan can handle the whole fleet. So, you know, I'm speculating here, but I'd like to see, you know, maybe some consolidation in the US Met Space, you know, in the US Met Space, there's safety in numbers. The more the more tons that are controlled in the Seaborn Market, the more pricing power that the US will have, and that is one thing that, you know, just reading the trade magazines that I complained about relatively often is like, they're not priced correctly, especially the low-vol, US East Coast low-vol should be a, you know, 5 to 10% discount off of PLV at every point in time in the market, yet because it's so illiquid, it just doesn't get assessed like that. So, you know, I'd love to see, you know, some, maybe a combination of like AMR and warrior or, you know, joint venture that consolidates all the Alabama operations or, you know, something like that. There's something creative that can be done over the longer term, I think, in the US, and then in Australia, there are a lot of moving pieces that they could kick things off. So, I'm kind of not really answering the question either. I think he's right that there will be consolidation here over the next five years, but, you know, as to what, you know, what commences the frenzy. Honestly, it's arbitrary. It's who has the desire to be in the market for that first. That's all. Yeah, thanks, Matt. The next question is on HCC, warrior medical, and it says, you know, it talks about them buying federal coal that's in reference to some federal leases they acquired, I guess. But I think the question from Carthic is, you know, where's my, where's my shareholder returns, where's my cash? And, you know, I think, you know, that echoes the sentiment of a lot of players, traders in the coal markets, but this is, I think this is a good expansion that makes a lot of sense of good quality coal. What do you think? I mean, is this the right allocation of capital? I mean, I mean, Blue Creek investment is done. So now it's time to, you know, give the money back to the people have been waiting for a long time to get some kind of shareholder return program put in place. It's more significant than what they have done thus far. There's still some barriers to that. I'm not sure when the net operating losses for Alabama roll off, but that's one barrier. But honestly, the ball's in Walton, Dale's court to be fair. They're the ones who are going to have to, you know, to reassure people that that's what's going to happen. And, you know, the folks out there that we know who are relatively close are of the opinion that we'll see something. And they have it something in mind, but they're just going to play it close to their vest until it's time to actually release the information. But as to what the timing is or, you know, what that's going to happen, I mean, I just don't know. So for me, you know, I kind of would treat, you know, HCC, the same as I would, you know, AMR as far as the cycle goes. They should decline, you know, through June. And there is a gap down there at around 70 bucks that I would love to see filled. And if that's the case, then it's a big old long from there. But, but yeah, until the shareholder return program becomes really crystalline, I think you'll have, I think there will be a larger percentage of renters of the stock than holders. Yeah, good, good points, Matt. I think now that they're through Blue Creek, let's see the Onus is on them. Next question, Jeff Wilkins, Yan Cole down almost 10% after earnings feels like an overreaction. That was on February 25th. I'd say it was overreaction, Joe. Come on, Matt. This is my, my softball. You heard it here on the coletrader.com Pat podcast first on Clear commodities network. Yan Cole will rally between February 25th and March, March 13th. It will rally a lot. Yeah, I think, you know, Yan Cole's a great, great stock. And we had that article out about ways to play the, the torque in thermocol prices. Yan Cole is a good way to do that. They got exposure to 5,500 and 6,000 high quality thermocols. And they're reactive to price and they got tons of cash. So let's see what they, let's see what they do with it. But a lot of cash for, they can do, they can do return cash to shareholders and do investments. And, you know, I've liked Yan Cole for a long time. And yes, still like it at 8 even, as long as, as long as we've got LNG prices at $18 per million BTU. So you heard it here on the coletrader.com. That's right. I'll flip to a question that got asked today here. And then there might be one or two more we can finish up on. But Mr. B asked me today, Matt, to what extent can steel mills adjust coal purchases seasonally? Could they buy much less in the summer? Or is procurement largely fixed with little flexibility? It's kind of a hard question. And steel is a very lumpy business. And it's based off of meeting shipments, right? So if there's a slowdown in the auto market and they don't take the shipments that they need or they can't offload them to warehouses in those sorts of things, then yeah, that can back up purchases for the summer in those sorts of things. But this year, there is a modicum of concern that especially with potential layoffs, being the jobs report from last week wasn't so great. If jobs get really tenuous as far as the unemployment rate go, that could curb big ticket purchases like automobiles, which is about 30% of steel to me. And that flows back through to Metcule. So sure, they can adjust coal purchase seasonally. But by and large, they buy enough to spread delivery out over a period of time so that they can keep their stockpiles managed as they're producing. And if they have to produce faster, they usually have to come back into the market to buy some spot tons to backfill them until they get to the next procurement area. So they can adjust, but it is product driven for them. It's not supply driven necessarily. It only becomes supply driven when the market is so tight that they are worried that they want to lose out on tons. And then they'll come in and buy in mass. And that's kind of what we saw, you know, post the cyclone in Australia here, you know, in the winter. And kind of what pushed, wound up pushing prices up to 250. So anyway, long story short, they still prefer to do those lumpy or purchases and spread out tons. But when they do those adjustments, that's when the spot market really takes off. Yeah, it makes sense. There was one last question actually from from the February chat about, you know, it was basically about building coal plants and building them around AI data centers, big tech companies. And, you know, this, this Iran disruption kind of underscores the need for coal. It's still very challenging to sell coal to any AI data center or a big tech company. They're the from marketing reasons. They're just not going to play in the coal space. We may have said that before. I think they'll they'll take the coal power. A lot of these data centers go online and they they try to be off the grid. But, you know, most things have a grid connection. Even when they claim to be 100% off the grid, they have a grid connection just in case. And in the case of these data centers, they have a grid connection and they pull gas and coal fired power when, you know, their onsite renewables don't don't provide their energy. And they're happy to take that, but they're not going to build it directly. I mean, I have first-hand experience in talking to them about this. And so it's a good question. The question came from coal. Nice handle. Coal, thanks for your question. But, you know, I think it'll, you know, coal plants will stay online. They're talking about reopening coal plants in Germany. Taiwan was talking about reopening a coal plant. You know, if the steel is in the ground, yeah, I mean, in the US, very hard. And, you know, I think plants stay on longer in the US coal plants, but you can't get anybody to build, you know, CCUS, very hard. And definitely, you know, the tech guys don't want to do it. So maybe, you know, somewhere in Wyoming with the PRB, I just don't know who's going to underwrite it. A coal company would be smart to do it if they, if they have the wherewithal to do it. And that's a major question though. Sorry, sorry, coal companies, but you're not power companies and you had, you had a chance to build these things over a long time and it just didn't get done. And now they don't, you know, they don't have the capital to do it. The expertise, I think would be hard for them. So it's a tough ask. Not fair enough. On that note, we've gotten through, I think, as much as we can here this time, we're coming up short on time. Is there anything else in the markets that you want to address here before we sign off? No, I'm going to get back to my ship watching. I was reading an article in, I don't know, was FT or something. And we're talking about a guy who's in Singapore. He's got a little apartment on the 47th floor and he can watch all the tankers and track which ones are coming from which countries. I mean, man, that would be, that would be heck of a lot of phone, especially in this oil and gas trading environment. But I'll just have to watch watch my vessels online, I guess. Well, you can come out to an app as we can count the coal boats out. Yeah, yeah, yeah. Just saying, you know, that's always an option. All right, I like how I might take up on that. Fair enough. Looking through on my end, you know, a few data points did come out, trying to steal exports down big, went from, it looks like 11.3 million tons down to, all the way down to 7.8 million in February. So that is a big fall. And that's two months worth of data, too. So I think that is pretty indicative that we should see China slow, pretty significantly here as we move into later 26. That always, you know, peak to trough from peak China's steel exports to, you know, spikes in medical prices. Usually last about two to two and a half years. And we're basically one and a half years, a little bit more than that, into this part of the cycle. So now is when this generally tends to resolve if past is prolonged. So that was a really, really great data point that came in. If their economy slows further, it'll probably slow their consumption as well. It's probably bad for Russia. I think Mongolia would be the supplier of choice in that scenario. And they'll still need to go to some combination of Australia or Canada for additional strength contributing property from those coal. So that was pretty important. And then I also had, I had Indonesian exports up. You'd mentioned this before, the drop off from, from December 31, shipped about 23 million tons of coal. In January, that was 17. And it looks like in February, that was down to about 16. So it's a pretty significant drop off from where we were at the end of the year. And that's part of the reason why Thermal coal markets are staying tight here. So I was on line, Matt with the assist from the Bloomberg. I love it. Hey, yeah. It took a while to pull it up. It's hard to run the Bloomberg and do a podcast while it's pretty draws on the resources. You know, but I think on my end, that's it for this week. Like I said, Joe, anything else that you want to cover before we sign off? No, I think that's a good place to stop. Thanks for thanks for your time, Matt. Always fun. Thanks to Clear Commodity's network. Hope you guys are enjoying the podcast. You guys write in with questions, but write in and let us know how you like the format, anything like that. And we can think about interesting things to do to change things up. That's right. So until next time here in a couple of weeks, I'm Matt Warder with me as Joe Aldina. As always, please check out our work at thecultrator.com or thecultrator.substack.com. You can follow me on Twitter @MFWordered. And thanks to our friends at the Clear Commodity's Network. You will catch you next time.