$ARLP – thermal coal prices have gone parabolic by 300% since Sept 2020; China energy crunch triggers alarm with pleas for more Coal; Europe turns to coal as gas shortage continues
Hear me out lads, ill make this as short as possible and present to you the key points why this is an opportunity that we can take advantage of, strike while the iron is hot.
What is happening in China right now?
- China energy crunch triggers alarm, asks for more Coal; electricity shortages by scant coal supply are crippling large sections of different industries including suppliers of Apple and Tesla; calling for more COAL supplies
- China is in the grip of a power crunch with one of the reasons being shortage of coal supplies; toughening emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs
- Analysts say the power shortage in China could become prolonged as the demand for coal and natural gas surges during winter
What about in Europe?
- Electricity generators in Europe have turned to coal as a solution for the current gas shortages on the continent. The recent gas shortages caused by the depleted reserves and low supplies from Russia and Norway has forced electricity generators to turn to coal for electricity generation.
- Increased global demand has caused the price of coal to triple and the price of natural gas to increase fivefold over the past year. Europe’s cap-and-trade scheme has pushed prices even higher
And.. how much is coal right now?
- Thermal coal prices surges above $200 as supply shortages worsen and higher Chinese-led demand for winter heating gripped the market; coal inventories in China continue to drop at the time when utilities in the country need supplies to prepare for winter; China’s ban on imports of Australian coal and limited domestic coal output due to stricter mine safety check has caused supply crunch for the world’s top coal consumer; now China is struggling to build up stockpiles because prices are high now,” Zuhdi said, adding that prices could go up further, but are still unpredictable
Coal prices at multi-year high!
And what is the current situation with US coal exports?
- U.S. coal shipments to China leaped more than 30-fold in the second quarter, as miners took further advantage of the Asian powerhouse’s prolonged trade dispute with Australia; the move by the Chinese government to block coal shipments from Australia truly has turned a large coal consumer into a top destination for the American coal; China has transformed into the second-largest market for U.S. coal exports
Why $ARLP Alliance Resource Partners?
First of all, ARLP’s market cap is currently at 1.3 billion. Why does it have to be that company? Well, ARLP is not only exposed to coal but also on oil and gas which are all trading at the peaks and are looking at shortages all over the world. With a PE ratio of 10, theres still so much room to grow…
A look at the financials.
ARLP reports second quarter performance, sequential increases to revenues up 13.8%, Net income up by 77.9% and EBITDA up by 25.7%; declares quarterly cash distribution of 10 cents per unit, and INCREASES GUIDANCE.
For the quarter ended June 30, 2021 up until today, coal prices has risen already by more than 100%, and I am pretty sure that they will slay the upcoming earnings report.
OPINION: Shortage of coal will only get worse once winter arrives. Price can still appreciate further. China will need more coal than ever before even if its trying to decarbonize because hey, they do not have any choice. And who else has no choice? Europe, when LNG is already so short, what else can you use to power up, you use COAL, and thats what they are doing right now. Another thing, we are on the brink of a global energy shortage as per bloomberg, everybody else is shouting GAS, OIL, URANIUM! But by golly, we idiots be the first to shout COAL! Good thing is, most COAL operators in the US who export to china (including yours truly ARLP) are rather small, there is so much ROOM for GROWTH, and thats a fact. If anyone can turn this into a nice DD, please do so. Im about to sleep and im tired as fuck. And this one should be a short term play, like until winter or up until prices or demand remain high. If anybody can make a sick ass research on coal, please do so.
Position: 7,300 shares
TLDR: *\* COAL is 🚀 **
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September 28, 2021 at 11:03AM