Coal stocks slip after Glasgow climate deal

Doosan Enerbility Co

15/11/2021 03:47

* Coal miners down in Asia
    * Selling crimps long rally amid energy squeeze
    * Oil, gas steady; China coal futures sink amid output surge

    By Tom Westbrook
    SYDNEY, Nov 15 (Reuters) - An international agreement to
reduce coal use dragged Asian coal shares somewhat lower on
Monday, but tight supply provided a solid floor for many stocks
in a sector that has chalked up huge gains this year.
    U.N. climate talks in Glasgow ended on Saturday with a deal
targeting fossil fuel use https://www.reuters.com/business/cop/un-climate-negotiators-go-into-overtime-save-15-celsius-goal-2021-11-13.
 Wording was softened https://www.reuters.com/business/cop/how-dispute-over-coal-nearly-sank-glasgow-climate-pact-2021-11-14
 to call for a "phase down" rather than "phase out" of coal
after lobbying from India among others.
    "The reality is that coal is going to be used during the
next decade or so. It's still going to be a cash generator,"
said Mathan Somasundaram, chief executive officer at
Sydney-based research firm Deep Data Analytics.
    Big miners China Shenhua Energy  1088.HK  and Yanzhou Coal
 1171.HK  fell 1% and 4% respectively in Hong Kong, where the
broader stockmarket  .HSI  was mostly steady.
    In Indonesia, the world's biggest coal exporter, the
declines were more marked. Top miner Bumi Resources  BUMI.JK 
fell 4% and rival Indika Energy  INDY.JK  fell 6%. Adaro Energy
 ADRO.JK  dropped 4%. 
    Shares in Australia-listed thermal coal miner Whitehaven
Coal  WHC.AX  fell 2% and rival New Hope  NHC.AX  fell 0.5% in a
slightly firmer broad market. Metallurgical coal miners South32
 S32.AX  and Coronado Global Resources  CRN.AX  dropped about 2%
and 3% respectively.
    The moves extend a recent pullback that has taken the edge
off whopping year-to-date gains for Whitehaven, South32 and New
Hope which are now up more than 40% amid a global energy crunch.
    China, the world's biggest producer and consumer of coal
churned out its highest tonnage in more than six years last
month, official data showed, which helped to knock near-term
spot prices  CZCcv1   DJMcv1  on Monday.  urn:newsml:reuters.com:*:nL1N2S604Y
    The Glasgow deal has elicited promises of future cuts to
use, has resolved rules for carbon markets and also takes aim at
fossil fuel subsidies -all of which could speed up the
transition to other energy sources.  urn:newsml:reuters.com:*:nL8N2S408N
    Elsewhere in Asia, Seoul-listed mine owners and suppliers
KEPCO  015740.KS , LX International  001120.KS  and Doosan Heavy
 034020.KS  lost between 1% and 2% in a broader market that was
up 1%.  .KS 
    George Boubouras, head of research at K2 Asset Management in
Melbourne, said under-investment in coal projects would probably
keep spot prices elevated from a historical perspective but the
fuel's likely eventual demise might limit gains for stocks.
    "High thermal coal prices...will not necessarily translate
into higher share prices to the same degree," he said. Oil
 LCOc1  was slightly softer and gas  NGc1  a touch firmer in
Asia and stocks in the sector were broadly steady.  O/R 
    Some investors have an eye on uranium as filling some of the
gap left as energy firms retreat from coal, helping uranium
futures  UXXc1  soar along with other commodities in recent
weeks.
    Large miners have rallied, lifting Canada's Cameco  CCO.TO 
to a decade high last week and Kazakhstan's Kazatomprom
 KZAP.KZ  KAPq.L  to a record.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.N. climate agreement clinched after late drama over coal   
 urn:newsml:reuters.com:*:nL1N2S405F
How a dispute over coal nearly sank the Glasgow Climate Pact   
 urn:newsml:reuters.com:*:nL1N2S505I
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Tom Westbrook; Additional reporting by Joori Roh
in Seoul and Melanie Burton in Melbourne; Editing by Edwina
Gibbs)
 ((tom.westbrook@tr.com; +65 6973 8284;))