By December 2021, the IEA was forecasting global coal demand to have grown by 6% during the year. As such, coal’s resurgence has called into question the world’s commitment to transitioning towards cleaner energy sources. Prices have surged once again in early 2022, largely due to a three-week ban on coal exports implemented by Indonesia the world’s biggest coal exporter, which continued to lead to further shipment delays even after the ban was eased on January 20. As mentioned by the IEA much of the coal demand and pricing will depend on India and China, the world’s biggest coal consumers with combined population of 3 billion people. Another catalyst for coal price surge is the rally in natural gas prices since plants in Europe and Asia shifter away from expensive gas into cheaper coal consumption.
Newcastle coal futures: On the last day of February 2022 , the coal global index broke its $269.50 high price recorded w/o 4 October 2021 to achieve 64% return in one week – February 2022- reaching $440, the price hike coincides with the Russian -Ukraine war followed by the EU’s economic sanctions on the Russian economy including energy thus imposing a sentiment of uncertainty in the global energy supply and mainly to Europe given that Russia supplies the EU with nearly 50% of their coal demand. The index pulled back its February gains through out March 2022 to retest October 2021 support levels at $269.50 to resume back the uptrend and retest February 2022 peak. If the current uptrend is intact then the expected weekly targets would be $570 followed by $650. On the other hand, if correction to be underway, the first support price zone would be $375 followed by $340 noting that trading at $300 price zone reflects trend weakness.
YANKUANG ENERGY GROUP COMPANY LTD: (1171.HK)
Yankuang Energy Group Co., Ltd. engages primarily in the mining business. It also engages in the coal railway transportation business. It operates through the following segments: Coal Mining, Coal Railway Transportation, Methanol, Electricity and Heat Supply, and Equipment Manufacturing. The company was founded on September 25, 1997 and is headquartered in Zoucheng, China.
The daily trend is bullish as the stock broke upwards the downward channel and reached high price at HKD 24.60 i.e. above the lower boundary of April 29th downward gap resistance. Next price targets would be HKD 25.35 followed by HKD 26.45. If correction would take place, the first support level would be HKD 23.20 followed by HKD 22.65. Breaking down the second support level would signal weakness in the current daily trend.
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