April 30, 2025
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Currently, API2 coal is trading at $95 per ton, creating what we believe is a compelling tactical opportunity. Our CEO Alex Claude recently returned from Colombia where he witnessed firsthand how depressed the mining sector has become - investments have dried up and operations are losing money at current price levels.
The data supports what he observed on the ground. Colombian exports have fallen well below five-year averages, with March already tracking below historical norms, April extremely weak, and May showing even further decline. Similarly, US exports are now trending below the five-year average for May, creating a tightening supply scenario across the Atlantic basin.
Despite this supply constraint, demand currently remains weak due to three key factors:
These temporary conditions have kept prices artificially low despite the increasingly constrained supply situation. However, what makes this particularly interesting is that European stockpiles provide minimal cushion for when demand patterns normalize.
Looking at the broader global picture, China's coal stockpiles currently appear heavy, suggesting an oversupplied domestic market. However, we're detecting early signs of improvement in Chinese demand patterns.
India presents a more optimistic outlook. After hitting a low point in February, Indian thermal coal demand has been steadily increasing. Historically, May and June are strong months for Indian power generation due to seasonal factors, and we expect this pattern to continue.
To discuss how this tactical opportunity might fit within your portfolio strategy, we're offering exclusive 30-minute briefings with our market analysts. During these sessions, you'll gain access to:
With only limited briefing slots remaining this week, we recommend securing your spot promptly using the form below.
