Coal stocks lose ground after Glasgow climate deal (updated)

Korea Electric Power

15/11/2021 06:47

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

 (Updates prices, adds Thai and Indian market moves)
    By Tom Westbrook
    SYDNEY, Nov 15 (Reuters) - An international agreement to
reduce coal use dragged miners' shares lower on Monday, but
tight supply of the commodity provided a floor for 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 3% respectively in Hong Kong, where the
broader stock market  .HSI  was mostly steady. An index of
mainland-listed miners  .CSI000820  fell about 1%. 
    In Indonesia, the world's biggest coal exporter, declines
were exacerbated by surging production in China, a top customer.
No. 1 miner Bumi Resources  BUMI.JK  fell 3% while Adaro Energy
 ADRO.JK  and Indika Energy  INDY.JK  tumbled 5% and 6%
respectively. 
    Shares in Australia-listed thermal coal miner Whitehaven
Coal  WHC.AX  fell about 2% and rival New Hope  NHC.AX  about 1%
in a slightly firmer broad market.  .AX 
    Metallurgical coal miners South32  S32.AX  and Coronado
Global Resources  CRN.AX  dropped about 1% and 4%.
    The moves extend a recent pullback that has taken the edge
off whopping year-to-date gains for Whitehaven, South32 and New
Hope amid a global energy crunch. They are each up more than
40%.
    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  015760.KS , LX International  001120.KS  and Doosan Heavy
 034020.KS  lost between 1% and 2% in a broader market that was
up 1%. Thai miner Banpu  BANPU.BK  fell 3%. Shares in Coal India
 COAL.NS  slid 3%, also weighed down by soft quarterly results.
NTPC  NTPC.NS  was flat.
    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, Muyu Xu in Beijing, Chandini Monnappa in Bengaluru and
Melanie Burton in Melbourne; Editing by Edwina Gibbs)
 ((tom.westbrook@tr.com; +65 6973 8284;))