Episode 23 - Met Coal Rebound, High-Vol Tightness, and Global Thermal Tailwinds

This is the Coal Trader Podcast on the Clear Commodity Network, your source for trading and investing in the coal market. Hey, everyone, and welcome to Episode 23 of the Coal Trader Podcast. I'm your host, Matt Warder. With me, as always, is my partner in coal, Joe Aldina. Joe, how are you doing, buddy? Hey, Matt. Doing well. Can't believe we're on number 23, but good to be here. I know. Hard to believe. Almost a year, I think, if not a year already. Wow. So, yeah, we're coming up on a milestone. We'll have to flag that when that happens. But pretty eventful couple of weeks, as it turns out. Yeah, things are happening. Kind of the same old story in the thermal coal markets. We'll get to that. We'll cover that off around the globe. But you had some interesting things going on in the met markets. Maybe you want to kick off with that. You could. You could say the met market is on fire in a couple of different ways. I mean, really, what the story has been the last couple of weeks is that China has their tight domestic supply has kind of forced them back into the market to restock even before India has gotten their own restocking season going. Usually, you see the Indians come into the market right around this time of year to come in for those post-bonsoon season cargoes. And their stockpiles remain at levels where they haven't really done that yet. So we've bounced off the bottom at 2, I think, 219 or 220, something like that. And now we're back up pretty firmly into the mid 220s. PLV is sitting right now at 223 on the August future. But if you look ahead to September, which is, you know, the future that's actually trading in volume now, that's all the way up to 236. And then the physical assessment right now for Margus was 227.45. So right now, I think it's clear that we've moved past the shoulder season lull that we were waiting for, you know, in April. And May and June, and actually have seen it here between, you know, sort of the middle of July and now. So I think the low point in the floor is behind us. Generally, when we look at August, August is a good month for met coal prices. September is usually a pretty good month. And it's not until October and November that you see markets kind of go the other way. We are limited on the upside. You know, if you take a look at Chinese margins at the moment, I want to say about for seaborne coal, about $26 for tier two coal, is the margin going into China. So that ARB is open at the moment. But steel margins are really still deeply negative. So they're capping the upside there. But really, the big news, I'm kind of beating around the bush here, is the second fire at Allegheny's Longview mine in central West Virginia happened last Wednesday. I got an alert while I was on my way back to the Greenbrier and had to, on my way back from the Greenbrier, back home and had to stop at a rest stop and send out alerts. And so that's a good thing. And I think that's a good thing. I'm trying to get a handle on the situation. But it sounds worse than the first one, honestly, although the reaction time seems a little bit quicker. Last we heard, as best as we could tell, the intention was to seal the mine and flood it to put out the fire. It's when you actually have fire on highball coal, I was told this by three or four different people, actually. When the coal gets to a certain temperature, it starts to coke itself. But because this is high volatile coal, the volatile matter itself will actually catch fire. So you have, it's just a much more difficult fire to put out than if you had a lower vol operation or mid-vol operation. So, you know, fingers crossed, nobody was hurt. Thank goodness. So that part's all good. But it remains to be seen just how long the mine's going to be offline. Safety inspectors are saying at least 90 days until you can get back into the real work, which probably puts the over-under at probably six months. Before we see production again. So I think there, I don't think we're going to see that 4 million tons of highball per annum for the remainder of 2026, which is sort of important. Of course, highball prices haven't moved at all since the fire announcement. They've stayed absolutely flat just because there hasn't been really any market activity. But that's a bit of a mouthful on our side, but kind of encapsulates everything that's happened. Joe, what's going on on the thermal side? Thermal coal has been pretty strong too, which is good. We like that. Most markets around the world are looking fairly strong, not YOLO strong, but, you know, the Iran situation continues to push, I would say, the energy security trade. You've got fighting flaring up in Lebanon. You've got Trump saying, no hurry to end the war in Iran. Oil around 90, you know, long-term rates up, and it just, it looks like coal, thermal coal is benefiting from all that as gas prices are back up to basically as high as they've been since the Iranian conflict earlier this year. You've got the TTF and the JKM gas prices above $21 per million BTU in the prompt in both cases. So European gas at TTF and JKM, and that's keeping thermal coal prices in Europe elevated. Europe's had some nukes offline and renewables offline and very hot weather. And we kind of are back to pricing API2 prices in Europe in the mid to upper 120s for this winter. So we're up 5% this week, something like that. And, you know, it's again, driven by gas, energy security. There's been some difficulties getting Russian coal out through the Black Sea and the Baltic with violence in both of those places with the Russia-Ukraine war. So pretty constructive in Europe, you know, still hot, still got the El Nino rolling here. Although I heard some analysts talking about El Nino maybe bringing in warm weather this winter and trying to, that could help Europe. But I mean, they're going to need all the help they can get. So I think it's going to be a lot of work. They can get to refill gas storage, which I think is at 59%. I mean, they're barely going to get to 75% if they're lucky. And that's just going to mean more LNG buying. So, you know, Europe's been hot, no pun intended, for a while. It's been a strong market. India is starting to look a little stronger, which is good. That helped pull up South African prices this week. Indian stock at coal-fired power plants are coming down. And we've been talking about this a little bit, but India had planned pretty well for the summer. There's also coal India was trying to better optimize production and dispatch to go with more of a just-in-time inventory model. So that transition over this year has made India a little bit weak for thermal coal imports, but that's changing. So now South Africa is going to be a little bit weaker. So that's going to be a little bit weaker. Coal is being bid up, and Indonesia, and, you know, it's pretty constructive everywhere. You were talking about China. I mean, China is pretty constructive on the thermal coal side. Chinhuan Dow prices above 126 here. You know, I'm not super bullish China, but I think it's hanging in there just fine. They're buying Indian material. There was some news this week that, you know, the peak in Chinese coal, the target is now 2030. So they keep pushing that back out. And yeah, I mean, Newcastle, Newcastle into the JKT markets, you know, quite strong, close to 140 this winter. And, you know, I think the market's realizing that coal companies are profitable at Newcastle 140. So, you know, very strong, but not exceedingly strong. You know, there's still maybe that optionality upside for the winter. But I think we've been saying. And, you know, we're constructive on thermal, and we've been right, which is good. We like to be right. And, you know, Australia's not up a whole heck of a lot, but I think the companies are going to do well here. We'll talk companies in a minute. But that's kind of the round the world on thermal coal. I'll pause there. Maybe you've got questions for me, or we can move on to the next thing. No, I mean, it sounds like the market conditions were kind of what we thought they were at the moment. You know, not terribly far away from how we envisioned them. I think the pullback in Met, you know, the very, very late shoulder season was a little bit of a surprise. I thought we'd hang around in the, you know, in the mid-220s for a little bit. But, you know, you have to have people in the market to have a market. And without weather or without restocking, you know, on the Met side, you know, there's just not much markets can do. But the cats have the bag, really. I think the Allegheny mine fire on the Met side will, over time, certainly, tighten the highball market. I think it will be very good for Warrior. I think it will be very good for AMR, which is up 10% in the past week. It will definitely be very good for Ramico, which is up 20% in the past week. I mean, just crazy amount. Because again, and I think I pointed this out last time, the short percentage or the short interest as a percent of the float for both of those companies, for Ramico and for Alpha, was approaching like 30% for METC and like 20% for alpha and it doesn't take much in the way of supply disruptions to just get torched on those positions. I've said I don't know how many times, I don't care for coal as a short. Just in general, I think there are better ways to express either the steel market pulling back or the energy markets pulling back. Coal is just, the equity side is just fraught with danger, whether we're going up or whether we're going down. And it's, you know, in my mind, it's just, there's too much risk on either side to really have a strong conviction either way. Now, you know, if you have to put on a pair, I guess it is what it is, if you're professionally obligated to do that. But I just, I'm not a particular fan of it myself. Looking down through the, you know, the rest of the other folks, I mean, Core Natural Resources had a fantastic report, you know, a couple hundred million dollars in free cash flow, you know, kind of on pace for. And we've been waiting, you know, for Core, for this call option and met coal, which I'm putting in air quotes to come to fruition. And we'll look where we are. We might have that. And specifically on highball, you know, highball benefits, like I said, AMR, HTC, Ramico, METC, Core Natural Resources, CNR, NP Body, to a lesser extent, BTU, which also has the Centurion mine coming on. They had an analyst visit last week, which reportedly went very well. Stocks almost back up to $26. That's up 5% over the past week, 15% over the past month. I mean, we got a little wind in our sales, Joe. I hate to say it, because every time I get bullish, you know, almost always marks the top, but I'm very constructive on the space at the moment. Yeah. And we did, you know, we did flag that these companies sort of had sold off too much, whether it be in the US or Australia. And we've seen the stocks back up here, which is nice. I think we highlighted the disconnect between and where the stock prices were. And, you know, we said accumulate is your word. We didn't say YOLO, but we said accumulate. Things are good. You know, you want some coal exposure. And then it was very nice to have some coal exposure today. I don't, you know, I have a little AMR, but I have the ARLP, the NRP, which, you know, on a day like today when the stock market churns, very nice to have coal in the portfolio. But yeah, these names all benefited from strong fundamentals. And, you know, we, I think we highlighted that fundamentals were going the opposite direction as share prices. And, you know, that's just a, it's a good time to buy. We don't, we don't have a crystal ball. We don't know exactly when they're going to bottom, but I think we did a pretty good job on that. Yeah. And I mean, I'll take the pat on the back. I think, you know, for myself on that, I'll give one to you too. And it's, the thing is like coal is seasonal in addition to being, you know, five on a five-year cyclical, you know, basis as well. So if you get, if you get the cycle, right, you get a lot of things, right. And that's, I think that's kind of par for the course. I mean, looking through Australia, Australia has really had a good week too. I'm looking at Yan coal up 2%, Whitehaven up 3.6%. And New Hope, again, on the thermal side, up 6% over the past five days. I think they had a pretty good report here just recently. They did. New Hope had a pretty good production report recently from Yan coal. And then we get the actual earnings report here coming out on the 19th for Yan coal and Whitehaven. So again, I think, you know, modestly positive on both of those. I think NHC has maybe already made its move, move a little bit more of the story is priced in, but I think Yan coal, if they come up with a pretty good dividend story, we get some news on Kestrel. I think it'll be a nice report on what is that? It's Wednesday. Wednesday, Australia after the market closed. So, so very, very early on Wednesday, US time, we'll hear from Yan coal. And I think Whitehaven is at the same time. The other one I wanted to point out before we probably take a break and go get reader questions is Thugela had a report today. And honestly, like, when I'm looking at this chart, this chart looks like it wants to just explode. It's up seven, I think 8% here over the past week. It's one of the ones that we, you know, sort of pointed out as when the rate of change on Thugela gets to the point where it starts to break out, it can move the fastest out of anyone in the thermal coal names. And that is holding true here at the moment. You know, they're up to, I want to say, let me see, where do I have them? I have them on the South African exchange, say, oh, here's London. They're up to five, five pounds or thereabouts. So, you know, I think that could go back to on the London exchange. I think it can go back to seven pretty easy with where thermal coal prices are. And just let me double check on Richard's Bay. Richard's Bay kind of hanging around the 110 mark for the balance of summer and kind of flat on the month. Unlike, we saw a little bit of strength in Newcastle, a little bit of strength in, a lot of strength in Europe, actually on the month of Richard's Bay kind of flat. But yeah, a little flat in the prompt. I mean, Richard's Bay, benefiting, I think India's stocks are going down. And then this Russian coal issues, particularly on the Black Sea, has Turkey on the bid for some South African coal. So I think fundamentals have improved a little bit. We do talk about Thungulla having the most torque to the upside when, you know, the energy, basically the gas price moves, the international gas price, JKM, TTF. And, you know, gas prices, the TTF price was you know, 52 euro per megawatt hour. And it jumped, it was 52 dollar, euros, excuse me, per megawatt hour, August 5th. And then it, it, it surged 10 buck, 10 euro per megawatt hour or more to where it is today over, over the last 10 days. And I think that explains a lot of the move in Thungulla. And so I think we had said it's a good option play. And I still think it's a good option play. And, you know, natural gas is going to be a good option play. It's going to be tough market to refill Europe here. So anything happens with, with weather and you get some kind of spark to the market and, you know, Thungulla will pop again. Absolutely. I agree with you there, Matt. Yeah, I think so. I mean, just looking here, the, the previous high for this part of the cycle, it's back on July 23rd at, it looks like this is on the London exchange. I'm looking at it again. It's a 511 pence and it's getting ready to, well, 500 today. Didn't quite get up to 511, but it's, it's on the March and it's, its momentum is moving decidedly upward. It's positive on the one month. It's still down 15% on a three month basis, but it won't take much to, to turn that around. And if we know anything, it's that, you know, the Momo chasers globally sort of like it when, when this one gets going. So we like it, you know, it's not one that I generally own in a cycle, but it's, it can be a great trade and it's one that we're looking at here. Yeah. I think it's, I think it's a good trade. You mentioned July 23rd. That's right about where the TTF price peaked in July. And then, you know, it's, it's almost at that peak again, 63 Euro per megawatt hour, 64 Euro per megawatt hour. So, you know, I have the chart up. It is exactly where, where TTF peaked as a matter of fact. Yeah. So no coincidence there. Sometimes, well, we had a couple of episodes ago, we talked about how fundamentals matter when they matter and they don't matter when they don't matter. Well, on, on this one, it sort of looks like they matter a little bit, which is, which is a much better situation to be in than we were a few weeks ago. Yeah, I'll take it. I'll take it. Okay. So with that said, let's take a break here right now to listen to our other friends on the Clear Commodity Network, and then we'll be right back with some listener questions. In mining, the difference between a good project and a great investment often comes down to one thing, visibility. Tara Hutton is a Sweden-based online mining investor platform built to make the invisible investable. Because a great project without a story is just data, drill results, spreadsheets, and technical reports that never fully connect. And a great project that isn't online might as well not exist at all. Tara Hutton brings mining projects into the digital mining industry, combining data, narrative, and context in one place. So investors can see not just what a project is, but why it matters. Whether you're evaluating early stage exploration or more advanced development assets, Tara Hutton helps turn complexity into clarity and information into insight. Visit Tara Hutton online and start discovering the stories behind the data. of Uranium Insider here, inviting you to check out the Going Nuclear podcast, co-hosted by yours truly and Trevor Hall and produced by the Clear Commodity Network. Each episode, we dive deep into the uranium sector and the fast evolving world of nuclear energy and uranium investment. From supply dynamics to policy developments and market trends, we bring you the insights that matter most to energy investors and industry watchers. You can find Going Nuclear on Apple Podcasts, Spotify, and at clearcommodity.net. Hey guys, welcome back to the podcast here. I'm Joe Aldina, joined by Matt Warder, as always. we're going to get into some reader questions here. I'll start you off with an easy one, Matt. Charlie Jones asked about Allegheny and flooding it rather than sealing it like they did at Lear South. I think you pretty much answered that. My recap, my layman's understanding would be that the high vol creates a broader fire and is not like the smoldering at Lear South. Is that the understanding there? Yeah, I think so. I think the difference is Lear South was an ignition event, let's call it, whereas this one sounds like an actual fire. Honestly, I'm speculating. I've only seen what came out on the West Virginia Mind, Safety, and Health Administration folks, but we'll see. The statement from the company really didn't go into any details, but the last I heard, for better or for worse, it doesn't. I mean, this is 100% accurate or not, was that they were sealing off the mine to flood it to make sure that they get the fire out, and then that is supposed to expedite re-entry at some point. Then it's a question of how quickly can they get in there? How long will the long wall have been sitting at that time? Then do they have to get another one, which would call into question whether they come back next year at all, or if the equipment's okay, how quickly can they pump the water out and get back? Like I said earlier, I'd probably set the over-under at six months. I would venture to guess it'd probably be over that a little bit. If we look back at Lear South, that was 12 to 18 months. I think that's kind of the range that we're looking at before. They were back online in the previous incident in 18 months. Lear South was 14 or something like that. I think it's probably a year if you held a gun to my head, but we'll see. Shareholder perspective, I know several people who are invested in it. I hope they get back going sooner rather than later. In the meantime, I hope Platts gets off the schneid and raises high-vol prices more than zero, which is all they've done so far. In our modeling, I should probably talk about market effects a little bit. From an annual perspective, it's about 4 million tons per year. In our models, when we take out 4 million tons of high-vol in the market, it makes a difference of only about $5 to $10. Within the first year. I don't expect the high-vol prices to move a lot, but when you get out into 28 and 29, or alternately, if you were to have another kind of supply shock to the high-vol side, another 3 or 4 million tons comes out, whether that is through idlings or bankruptcies or just general production attrition, then we're talking more in the $15 to $25 range. That kind of gets us up to where. Low-vol is right now. I think U.S. East Coast low-vol should be much higher. We've made a lot of noise about that here in previous podcasts, but that's kind of where the high-vol market would normally be under normal circumstances if we had, say, 6 million tons just out of the market in general. This gets us halfway, three-quarters of the way there. It's going to take time for it to average out to that $5 or $10 number, but I would be sure that it's going to take time for it to If we don't see some sort of material move upward by the end of restocking season. Oh, thanks for that, Matt. Another pricing question from A. Schultz90 in the chat here about Warrior and why they are selling at the prices they're selling at. Is it a strategy to undercut competitors? And can we just ask management? I know you do talk to management across the industry. That might be a tough one to get them to admit. It's a pricing strategy like that. And I know you've talked about this issue quite a bit and the mine is new, but are they really undercutting or are they just kind of finding their own brand in the market there? No, I mean, I think it's pretty clear that they're undercutting relative to the value of the material itself. And they're undercutting relative to the value of other highball producers because they have a super low cost position and they can afford it. On one hand, it's rational for them to do that. That's the same sort of A. Schultz is referring to BHP jacking up production as prices collapsed during the resource collapse of like 2014, 15, 16, right? And that sent Metco prices, I think, down to like 90 bucks or something. It was incredibly low. The double whammy of oil collapsing and BHP ramping up PLB production in Australia during that period really just put the kibosh on any upward momentum for Metco for a while. And I think that's a really good point. I think that's a really good point. You know, the better part of a decade. But this isn't that. First off, you know, we've talked before about how Blue Creek in particular doesn't really slot into a true highball A. It doesn't have the fluidity that central lab coals have. It has a higher CSR. That's not really a selling point for highball A coal, for true highball A's. So it's just not really what they say it is as default. I mean, you know, Platts and Argus have made available the indices that they think are the most relevant to the broader industry, right? And if you have too many indices for an already illiquid commodity, well, it just makes each one of those individual indices more illiquid than it would have been otherwise. So, you know, in discussing this with some of the some of the folks at the price reporting agencies, I think it's probably better off in the longer term. And we've made the case on the substack back in May to just have, you know, a reference price, whether that's PLV in the Pacific Basin, and then price everything else off of a quality basis. PLV is sold FOB port and FOB port should be FOB port the world around minus, you know, strength characteristics, you know, premium or discount minus a sulfur premium or discount minus an ash premium or discount. You know, each product, the the Coke makers know what they are. But there's often not a really good way to translate some of these new entries into the market, just because they don't overlap with anything that the market's seen in the past. I mean, Blue Creek is sort of like, you know, it's similar to a number four coal, but at a, you know, 3% higher ball content, you know, fluidity characteristics are like, I mean, less than a 10th, there may be a 15th or a 20th, what fluidity characteristics are for central app coals. And while they're stronger, because the ball content is so high, they can't really displace premium mid-ball coals. So in my view, Warriors doing what they have to do to place the coal, period, stop. You know, this is not something that anybody's used before. So they're pricing it at a level that will encourage people to use it with the idea that, you know, also, it may force out, you know, some, some of their competitors over time. But the problem is, like, it's just not a one for one replacement for that quality. So I don't, I don't really think that happens. If you look at a chart of high ball production in the US, there is some replacement from Northern app and Southern app, but the total just goes up. So as more, as we produce more blast furnace steel, the world's going to need more high ball. So, you know, I don't think you can necessarily displace that many people. I think that the quality differential is too big. And, you know, in that sense, you know, I'd rather see them start raising prices once customers get comfortable sooner rather than later, you know, to get to what I think would be a reasonable relative point for that coal, which is like a, you know, high ball minus ash plus CSR. It's probably a high ball a plus two or 3% would be my guess as to where it's going to go. Should be priced. And, uh, you know, if I'm a warrior shareholder, I of course would rather them sell at a higher price than a lower one too. So there's that it's a, it's a long-winded way of saying it, this isn't an easy business. You have to convince people to use the coal, but, uh, you know, I would like to see him sell a little bit higher. Yeah. I mean, if you go back to the shale analogy there that a Schultz makes, you know, those guys were, they're undercutting, they're, they're competing on price. Cause that's what commodities producers do. Matt Cole's got a little bit more unique characteristics and brand names and different properties. So yeah, you're, you're undercutting, you're, you're doing what you have to do to survive. I guess that's my takeaway from your comments. Of course you've got, you've got high fixed costs, you've got to move product. And then of course they would like to, uh, they would like to see a higher, higher pricing. They don't want to, you know, not, not a long-term strategy here to undercut somebody to, to somehow push, push people out of the market. Cause it's not a one-to-one replacement and all that kind of stuff that you hit on. If I can summarize there, maybe. Yeah. And obviously this is, this is a point of contention for everybody. Everybody wants to know ultimately two things about warriors. Like when are they going to raise blue Creek prices? And when are they going to establish a shareholder return program? And right now the answers to those two questions are, I don't know. And as long as that's going to be the case from a shareholder perspective, that's why I'm going to rank CNR above them because, you know, Jimmy Brock's been adamant where you have $200 million worth cashflow, you know, a significant portion of that going to the buyback. If they also get a call option on Metco, that $200 might go to $300 or $400 million in free cash flow. And as long as they're buying back stock, I would rather be with the company that's doing that than with the one who, although they're amassing cash, hasn't decided how they're going to give this back to folks yet. Yeah. Yeah, that makes sense. Thanks for that, Matt. I see later down in the chat, there were some other, Travis kind of asked that same question. So, so appreciate you spending some time on that. I'm quickly going to skip to Charlie's question about warm winter derailing the thermal demand picture headed into the end of the year here, or does that structurally not matter because Ross Lafon issues are still going to be present? It's a good question because that's exactly what happened in 2021, right? Yeah. Yeah. I mean, anything can, anything can happen. I think you, you need a pretty big, uh, and pretty warm winter in a lot of places to derail this. I, you know, I think the, the idea that El Nino could come in and warm up Northern hemisphere, it also can create, uh, storms that impact production, but you know, it's one of those wild cards that, that means I'm, I'm not extremely bullish, but I'm still bullish. I think because Ross Lafon will be off, it can't ramp up quickly, even if traffic through the Strait of Hormuz is restored. And I don't think that's likely, or at least restored to its full capacity. I don't think it's likely. I think there's more bullish factors here than, than warm winter, but yeah, I mean, it's always a potential and it could, uh, could help European gas quite a bit, but we're going into the point where they almost need a warm winter or they're going to be in some really bad trouble. So that's, that's, that's exactly right. That's where they were for, uh, they were, in that exact position in 2020. 2021. And, uh, they got lucky. So are they going to get lucky again? I mean, I don't know. We're not weathermen, but, uh, the problem with Ross Lafon as an overhang for at least, uh, you know, three or four years is that, I mean, every, every seasonal cycle, this is a, that has, this is going to have a cumulative effect. I mean, you not only have to have a warm winter, you also have to have, you know, uh, a mild summer, which probably isn't going to happen. And then you can't have any, you know, a warm winter. So, uh, I think that's, I think that's, I think that's sort of demand events in the shoulder seasons either. So, you know, the longer that Ross Lafon is offline and the longer that there isn't supply LNG supply coming into the market to offset that decline, the, uh, the worst, this structural problem is going to get every cycle. So that's kind of how I think about it. I don't think the investment thesis is, you know, succeeds or fails based on this winter. I think it could be the winter after that or the winter after that. And, you know, if you're a, you know, monthly, quarterly allocator, there's a lot of, there's a lot of volatility to trade in the interim. And, but even if you're a buy and hold person, I think this is probably one cycle you can hold a lot of energy through. The, the question before this was about, you know, the Iran war cycles, you know, the U S capitulation and the stalemate versus the blockade versus U S is escalating. And again, uh, you know, the, the, the on again, off again, nature of the war. I can't think of a better way to put it. Predict any of that. So I think it's just best to, you know, be, be moderately bullish for the cycle and wait to make a judgment call when we get some kind of concrete knowledge that, uh, the, the problem is either going to, you know, get solved due to an increase in supply that we know is coming, uh, or alternately, uh, there's some other solution, be that fuel switching, be that, you know, faster acquisition of, uh, the equipment. If we see something like that, we can change our mind. But until then, I think it's just structurally a pretty solid trick. Yeah, I agree with that, Matt. What do you want to pick next here? We could, we got some questions about Australia. We just got a lot of questions today, 23 or something like that. Actually it doesn't look too bad. Maybe we can make it through, um, all of them. I'll hit on Farzen's question. I'll put that to you, Matt. Scenarios for met coal prices and demand. That's, I see. That's what you were talking about. You know, capitulation, stalemate, blockade, what, what happens? I mean, I, I think the straight opens again eventually, but right now it's closed. And as long as it's closed iteratively, that means that there's probably going to be a increased demand for alternative energy sources, which means thermal coal, I think, you know, has a bit under it on the met prices. That's more industrial demand. And, you know, the two, the two markets that are currently driving the trend are China and India in an alternate fashion. China's been very clever about securing energy through this, uh, through this difficult period. Um, but the, the one, I think for met coal that I would watch would be Europe. Um, I think Europe is actually going to have a pretty interesting, uh, rebound here over the next year, as far as steel demand goes, you know, they've had to reshore some of their defense production. And as long as that's going to be the case, I think on an inflection basis, Europe probably looks pretty positive. It's not going to be a huge uptick in demand, but it's going to be positive as opposed to flat to down. And then the other one, uh, the other obvious one is that there's any kind of a resolution in Ukraine. Uh, that's a, that's a positive short-term boost for, for met coal as well, but the rest is, is contingent upon India continuing to grow and China's decline slowing, which so far so good. You know, I think the, uh, the issues with the Strait of Hormuz probably affect met more on a pass-through, uh, cost escalation basis than they do on a direct demand basis, if that makes sense. Yeah. I was going to guess that. So I think that's what confused me initially. It's more of a thermal coal question, I think with, with what happens with Hormuz, because it'll directly flow into gas prices and that'll change, you know, energy security, energy price. Yeah. It changes the cost curve for the whole, for thermal coal and met coal. Yeah. It changes your whole electricity complex pricing and fuel supply mix. And so, yeah, I mean, if you have us capitulation, you know, and the, and the Strait of Hormuz opens up again and you have cutter back online, Roslathon and, and pumping gas by the winter, then LNG cargos are available. And, and Europe is not in as difficult a spot this winter. I just don't see that happening basically. I mean, if it does happen, we're going back to December, 2025 prices. Yeah. You know, that's the last period where we didn't have, you know, an upcycle from a seasonal perspective and also the, the tension in the Gulf, in the Strait there. Yeah. You'll, you'll have some whiplash. You'll have some whiplash. I don't think it's that likely, but, but yeah, if you think that's a likely scenario position accordingly. And yeah, I think the stalemate is most likely U.S. escalation, probably less likely going into midterm elections. And I think Trump was, you know, asking for forgiveness on gasoline prices already. You know, there's limited room to maneuver politically. So I don't see it escalating. I see stalemate blockade, status quo, you know, a drip, drip flow of ships through Hormuz and, you know, a little bit of a pushing out of the oversupply in LNG markets by a couple of years, which is sort of consensus based case. So I, you know, if I had to bet, that's where I place my bets. Not a bad idea to have some, you know, warm winter U.S. capitulation protection on the downside, but it's not in my base case, I guess. No, that's fair. I'll take quickly some discussion on Australian valuations. The first thing I would say is that valuations are arbitrary. I don't really pay attention to valuations because it's not really that important to me. You know, where I look at, what I look at mostly is where the companies are in their price cycle and where prices for the underlying commodities themselves are heading. So, you know, in that sense, you know, SMR is at $2.56. I mean, I liked it. I think we called it out when it got down to around $2.20, you know, the last three times, like back in April and then again in, I think, in early July. And then I can't remember if we mentioned it a couple of weeks ago or not, but it was on my radar. But it's been going back and forth between like, you know, $2.20 and $3 Australian. I actually think we'll probably get a lower high here just because that segment of the MET market is going to be a little bit lower. The semi-soft and PCI and tier two, like it just hasn't really gone anywhere. So I think Stanmore is probably just a hold at this point, if you already own it. It's not bad. It's not great. It's performing kind of as we would expect. When I look at Whitehaven, however, you know, Whitehaven is the Australian equivalent of CNR to some degree. And I think quite a lot of people are going to say, well, you know, I think Whitehaven has a chance to go right back to $9.50, you know, $10 again. So I like Whitehaven a lot, you know, relative to here, you know, that's what $2.50 upside is about a 30% upside relative to here. And then EANCO, I mean, EANCO still got the acquisition overhang on it. So it's been tough to get out of this range. I'm not sure that it can, but, you know, in my view, it should. I think it, with the EANCO, it's going to be a With the acquisition, it should be trading around seven and it's down at five, but I'm not sure it has enough momentum to get out of that out of that range but new hope actually looks like i think it's going back to i think it's going to make higher highs it made uh it made a higher high in march it made a higher high in may i think it's going to make a higher high here in september you know of the of the three i think this is the one that has you know the kind of clear momentum upward although it's you know it's it's cycling up and down it's not really making crazy new higher highs uh it's the one that is definitely moving in the right direction but if it's me i like the call option on that for white haven the same for the same reason i like the call option on met for core natural resources and for btu as well so i kind of put all three of those hybrids in the same boat yeah yeah i'll say i think i think yan cole we we we know based on their second quarter production result they had pretty good production i think the call coming up here on wednesday is just going to give us some commentary on a few things from management like kestrel whether the deal is going to get done in late september that's kind of my expectation and i think if and management might signal um you know uh a constructive view on the second half of 2026 because yan cole's uh reporting first half 26 always a little tough to keep track of that compared to the the us guys that report on a calendar year basis but i think yan cole reports you know a modest uh uptick in earnings from uh second half of 25 and i think i think as long as management provides clear guidance on kestrel maybe a nice outlook um they come up with a dividend which i think will be healthy kind of above 12 cents a share i think the stock has has room to move so but it'll be an interesting call because we need some guidance from management as to how things uh play out here whether kestrel is going to get done how it you know the exact funding plan all of those things but if management delivers i think it'll be uh i think the stock will have a solid upside all right let's try to do two pretty quickly here there are a couple that we sort of addressed but didn't get to specifically but uh the one i wanted to ask you before we go is uh rupert asks it seemed like the investment thesis with halidor was the indiana coal mine provided them with logistically advantaged megawatts to sell into a strong market what are the implications of the miran natural gas conversion for their business will they continue to use coal to generate power in any capacity yeah so they won't use coal they will switch to gas and i think it was just aging aging equipment and that's the way the market's moving you know getting air permits for coal was probably not tenable uh they had been you know as long as we've been covering halidor they've been talking about a natural gas conversion and i i think that's what's holding the stock back because it's been a great power market play but now they have to put real capex into a gas plant uh and then there's project risk and execution risk on something that they haven't done much of in the past but overall they're doing a good job uh i just think in the high teens it's probably fully valued with out some more certainty on the gas plant but i think you know if you think they're going to execute well on the gas plan it's probably worth uh worth more than that i mean the uh the the power markets are structurally very tight and they are going to benefit from from the structurally tight power markets but now it's really it's not going to be a cold play at all it's going to be a gas into power play it's basically just going to be a power plant company so yeah i mean i i like it i think we need to take a little closer look to it at it but yeah that's why people that's why the stock's sold off and um but i you know it's a good it's a good power play just uh be careful a little bit on the project risk uh there yeah i mean utilities tend to do well in periods of kind of stagflationy macroeconomic conditions not terribly dissimilar to what we have now so you know i think it's probably okay for the short term and then uh utilities are inherently defensive so like you know how door from a price behavior standpoint is making the transition also from you know being a volatile coal producer to a differently volatile but more stable utility provider so it's there's a change in behavior there too which not me not being a utility analyst i can't really help other than to say it behaves according to the cycle and it behaves according to macro conditions and uh if it's like other utilities should kind of lock into that pattern over time yeah i'll just piggyback on that stefano's question about thermal coal in the u.s and what's happening there and are uh u.s coal plants increasing utilization the answer is i think you know coal mainly across the u.s like the eastern coal basins are doing quite well uh and you saw that in uh alliance results you saw it in cnr results and prb is is struggling a little bit u.s gas has been fairly cheap even with the with the uh lng boom and really high feedstock of u.s natural gas into export markets overall inventories are a little little high in the u.s which is tamping things down but but you know a cnr and an arlp with appalachian and illinois basin coal they're doing quite a lot of coal they're doing quite well i think coal plants are generally doing quite well if you look at pgm and miso you know that's where you that's where you want to be positioned um and so that that story is still intact you know u.s gas prices i think that i haven't bet on higher u.s gas prices in a long long time there's going to be tremendous amount of feedstock demand i'm still not betting on much higher u.s gas prices but i think coal coal does well in those mice on pga on regions because of the strong power markets that's what i would say yeah that makes a lot of sense honestly the there's one last one that i want to talk about anyway and then we'll finish up unless you have uh you know some other comments to make but um julius asked what do we make of the current run-up since first of august too fast too quickly or just buy in now before we finally leave the train station i'm going to say the same thing i've been saying accumulate you know i was averaging down when prices were going down and keeping kind of my percentage exposure as a total volume about the same uh you know about 10 to 12 you know two full positions in um cnr and btu and now i'm averaging up so you know i continue to rotate money into the sector away from other sectors and like i just pulled these up like when i'm going through charts whether it's amr or ramico or let me pull up hcc and see if it's doing the same thing i think it is there i don't think there's a single one okay hcc got a little bit overextended it's rsi got up above 70 there for a hot minute and it looks like it should probably slow down as we approach 100 or should anyway it's very well owned so who knows but uh most of the rest of the stocks like you know their their their price chart is going up and to the right at a 45 degree angle but when i look at their um you know two standard deviation lines whether that's uh two standard deviation deviation turn up or down they're also going up and to the right at a 45 degree angle so the company itself that the stock itself is just continuing to rearrange those standard standard deviation parameters as time goes forward no it's not done so it's not going to be a good thing for the stock market but it's going to be a good thing for the market and it's going to be a good thing for the market and it's going to be a good thing for the September unless there's a supply shot. So again, I think all the factors are kind of pointing in Cole's direction at the moment. And especially for companies like Core that we know are buying back stock, I feel very comfortable accumulating. BTU, again, they're increasing production of low vol into really good low vol prices. Warrior Metco is ramped up, but their prices received for Blue Creek, I think you've seen the lows for them. So again, I think the whole industry probably gets healthier as we go forward. Is it going to overshoot? Yeah, I think it will. I think it probably will overshoot. And so you have to be ready to start to trim as we get to the end of the month and into the beginning of September to kind of brace for the next shoulder season. But man, Joe, I think we're in a good spot, buddy. I really do. Yeah, I agree with you. I think um, I think, you know, thermal coal is is modestly, you know, modestly constructive. There's some option value out there with gas. But I think the stocks, as you highlighted, they'll trade more, you know, rally with with these small cap factors and things like that, more than necessarily follow the fundamentals. Or I think of, you know, Yan coal and and other thermal plays. I think they sold off too much. They've got a little bit of juice, juice, juice left, but I'm not, you know, I'm not sure it's a fundamentals trade on the on the thermal coal side. I think it's more of what you outlined, like it's it's energy security. It's it's small caps. It's it's those kind of factors that drive. Yeah, I mean, I have on my screen at all times, I have the the IWM, the spy, the cues, and I have a high short interest index that's on the Bloomberg terminal. I look at those every day. I probably should start talking about them in the general chat. As well, because I think it's, I think it's helpful context to, to lay over cold stock performance as well. But in general, like, I haven't changed my mind about anything. I think the bottom is in things are going to get better through at least the next few weeks. We're going to have I think another, I think we're going to have another spot to load up in the fall. Unless, you know, again, there's a supply shock or something happens on the demand side to kickstart it to the upside. But I think, right, now, there's no indication that markets shouldn't be relatively predictable as they have been for the last, you know, 20 years that we've been involved in this industry. And if you're if you're nimble, I think you can probably take advantage of that pretty well. Yeah, yeah, good point here. I mean, trading does kind of fall off in the shoulder season. I mean, that the large cap stocks tend to sell off in the fall, though, too. So, you know, that's, that's sort of another factor where I like, I like holding coal, but, you know, certainly if things pull back in the shoulder season on thermal, I'd be looking to buy. No, for absolutely for me, too. But before we wrap up, Joe, any other any other things on your mind on the industry side? A lot of things on my mind, man. How much time do we have? They're not they're not necessarily coal related, but maybe for another podcast. Yeah, we can we'll start another one for for all those thoughts. I got a lot of thoughts, too, that we can share some other place. But if that's the case, buddy, well, thanks. As always, for for coming on with me. And thank you all for listening to the Coal Trader podcast on the Clear Commodity Network. As always, for my partner in coal, Joe Aldina, I'm Matt Warder. Thanks for listening, and we'll catch you next time. Thanks, guys.