Argus has just updated their Hampton Roads coking coal pricing data for Friday and U.S. coking coal gained another $2.50 to finish last week at a new all-time high of $290 per tonne! Click here to see for yourself!
There is a huge divergence between Chinese coking coal and U.S. coking coal. Chinese coking coal on the Dalian Commodity Exchange finished last week at a new all-time high of $510 per tonne! Chinese coking coal is priced $220 per tonne or 75.86% above Hampton Roads coking coal, which is why China is desperate to secure new sources of coking coal from North America!
The largest gaining stocks in the upcoming weeks will be companies that can export their coking coal to China. The overwhelming majority of publicly traded coking coal companies are based in Australia and trade on the ASX. China has banned imports of coking coal from Australia, which means no ASX coal stocks will be able to capitalize on China's desperate need to increase coking coal imports.
Most North American listed coal stocks are thermal coal stocks and are unable to capitalize on the coking coal boom. There are a select few North American listed coking coal pure plays like Ramaco Resources (METC), which gained by 14.05% on Friday to close at $14.04 per share where its market cap is now $619.3 million (CAD$782.87 million). Although METC is a well run company, it will not be able to capitalize on China's desperate need to source coking coal from North America!
METC sells nearly all of its coking coal to domestic U.S. steel mills at much lower prices than the $290 per tonne that a select few companies will receive for exporting their coking coal production to China! METC is currently stuck in contracts that mandate them to sell all of their coking coal domestically at fixed prices. Although METC will eventually be able to renegotiate their domestic supply contracts to much higher coking coal prices, METC's coking coal mines are not located close enough to a port to consider exporting their coking coal to China. METC's coking coal will always sell for prices that are far below the Hampton Roads coking coal price.
Morien Resources (TSXV: MOX) through its ownership of a 2%-4% gross production royalty in the Donkin Coking Coal Mine, which is located a short 30km from Provincial Energy Ventures (PEV)'s newly dredged port is the only publicly traded coking coal company that is perfectly positioned to fully capitalize on China's desperate need to source new coking coal supplies from North America!
We believe contract negotiations are secretly taking place right now between China's largest importers of coking coal and representatives of both Kameron Coal the owner of the Donkin Coking Coal Mine and their business partner PEV, which is owned by North America's largest exporter of coking coal to the Asian market Ernie Thrasher. After Donkin restarts operations in the upcoming months, Ernie Thrasher's PEV plans to make Nova Scotia the epicenter of the North American coking coal export market. All coking coal exported from the U.S. by Ernie Thrasher's companies will go through Nova Scotia on their way to international markets so that every vessel leaving the U.S. can be "topped off" with coking coal produced by the Donkin Coking Coal Mine.
MOX's largest upward move in history is imminent!
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