Bogdanka and JSW up by several dozen percent. The war in the Middle East disperses the coal trio
The blockade of the Strait of Hormuz – a strategic bottleneck through which approximately 25% of global oil trade and 20% of global LNG transport flows – has led to a drastic increase in gas and oil prices. As a result, coal, which was recently under strong pressure from the decarbonization agenda, has returned to favor as a key stabilizer of energy security. The prices of raw materials are rising, and so are the prices of companies extracting them on the Warsaw Stock Exchange and global stock exchanges.
Coal prices on world markets rose to around $140 per tonne, remaining near the highest levels since November 2024as the escalation of the conflict in the Middle East and the resulting disruptions have significantly increased global energy supply risks.
The price of crude oil rose above $100 for the first time since 2022 after major Middle Eastern producers cut production. and the Strait of Hormuz remains effectively closed. Moreover, the suspension of Qatar's massive liquefied natural gas production has increased the need for fuel switching in the energy sector.
Crisis in the Middle East related to the conflict between the US and Israel with Iran It hit Europe and Asia particularly hard, where liquefied gas was an important component of the energy mix. The drastic increase in the costs of blue fuel has made coal-fired power plants profitable again, overtaking gas in the hierarchy of profitability of energy production.
The coal trio from the WSE
Increases effect prices on the coal market immediately translated into quotations of mining companies on the Warsaw Stock Exchange. Investors, noticing an opportunity to improve margins and increase demand for domestic raw materials in the face of import risks, started purchasing shares of Polish producers.
Course LW Bogdanka becomes the sector's growth leader on Monday, recording an impressive price jump of over 9%. The company, which is one of the most effective producers of steam coal in Poland, The price has already increased by almost 40% since the beginning of the year. because the increases in coal prices have been going on since November last year, and now they have only accelerated due to the war in the Middle East.
It also shows growth Bumech, which is the owner of the company operating the Silesia mine. Interestingly, Bumech is currently a party to the mine lease agreement and has applied for the transfer of the mining concession from the Silesia deposits to the company. What makes the whole thing even more interesting is the fact that the mine's days seem to be numberedbecause, as the main shareholder of Bumech, Marcin Sutkowski, says, the Silesia mine is bankrupt, and coal mining there may end within 3 years. However, this does not prevent investors from increasing the price by nearly 3%. at Monday's session and already over 20 percent. since the beginning of the year. It is worth remembering that Bumech's price also benefits from information about the company's attempt to diversify its activities into the arms industry.
Węglowe trio on the Warsaw Stock Exchange complements the course of Jastrzębska Spółka Węglowa (JSW). Even though it focuses on the extraction of coking coal used in the steel industry, it is also participating in the boom. The JSW stock gained over 4% on Monday and 35%. since the beginning of the year, which also reflects the global upward trend in metallurgical coal prices, which often follows the general trend on the energy market and the increased demand for steel in the conditions of increased reinforcement and reconstruction of critical infrastructure.
Global leader of the coal price rally?
Even though the entire mining industry is feeling the positive effects of price increases, Bloomberg points to one company from global markets that is uniquely positioned to monopolize profits from the current crisis. That company is supposed to be Glencore. According to estimates, spot prices of raw materials imply as much as 21%. EBITDA growth potential for this company over the next 12 months. Glencore's advantage over other mining giants comes from several key factors.
Firstly, it is the specific mix of raw materials that Glencore extracts. The main drivers of the company's EBITDA growth are thermal coal (responsible for 9% of the growth potential) and copper (5%). In times of energy crisis, exposure to coal is becoming a “hidden treasure” that the market has previously underestimated – writes Bloomberg.
What's more, The company's trading platform is to be the real goose that lays golden eggswhich covers a wide range of physical raw materials that the company sources, processes and sells globally. Glencore acts as an intermediary in the supply chain, adding value through blending, logistics and optimization (e.g. warehouses, ships, ports). Thanks to this, Glencore generates profits from arbitrage and logistics services, in addition to the extraction of raw materials.
The company's sales department flourishes in the conditions of the “war bonus”,
capturing arbitrage resulting from the detachment of coal, oil and gas prices from market fundamentals. Leveraging an extensive logistics network to reroute energy loads and navigate variable freight rates, Glencore achieves margins unavailable to its competitors.
Market reality forced a return to fossil fuels.
For Polish companies such as Bogdanka or JSW, and on a global scale for Glencore, this may mean a period of extraordinary profits. However, particular caution should be exercised in assessing the durability of these increases. The current boom is closely correlated with the high dynamics of military and political eventswhich determines the high volatility of rates.
On the other hand, continuing tensions in the Middle East and possible permanent disruptions in gas supply chains may maintain the quotations of the above-mentioned companies at elevated levels for extended periods of time. Investors must take into account that this sector currently reflects the market situation in terms of short-term profits, but is also extremely sensitive to any signals about the restoration of stability in the supply of raw materials.
