Commodities: Coal
New Hope’s FY26 result released yesterday was broadly in line at the earnings level, but the more important story is the setup into FY27. Earnings fell sharply as realised coal prices declined and costs rose through the New Acland ramp-up, but production increased, the balance sheet strengthened and coal prices have already rebounded materially since year-end.
War has exerted a major influence on energy prices over recent years with no clear end in sight, just lots of talk and hope.
YAL has been on a rollercoaster ride in 2026, initially climbing from around $5 in January to above $6 following its FY25 result before surging towards $9 in April as metallurgical coal prices strengthened and speculation around the Kestrel acquisition gathered momentum.
New Hope (NHC) is primarily a thermal coal producer. Its two QLD operating mines both produce thermal coal for export and domestic power generation. The miner has been one of the ASX’s standout performers in 2026, rallying ~49% YTD from ~$4 as stronger thermal coal prices, solid operational delivery and improving broker sentiment drove a significant re-rating.
The key difference between thermal and coking coal is what they’re used for. Thermal coal is burned to generate heat and electricity, primarily in power stations, whereas metallurgical (coking) coal is used to make steel. Coking coal has particular chemical and physical properties that allow it to be heated in the absence of oxygen to produce coke, which is then used in blast furnaces to convert iron ore into steel. The important difference is that high-quality hard coking coal is relatively scarce and cannot easily be replaced by ordinary thermal coal.
Whitehaven’s FY26 was understandably softer as weaker coal prices through most of FY26 weighed on earnings, with revenue of A$5.40bn, EBITDA down 8% to A$1.25bn and operating cash flow down 16% to A$1.06bn, alongside a 6c final dividend.
Australian Premium Coking Coal (aka metallurgical coal) has gained ~8% YTD, although the solid headline advance masks a volatile year. Prices initially rallied in February as Queensland flooding, mine disruptions and Chinese safety inspections tightened supply, before retreating sharply as Australian production recovered and concerns around Chinese demand increased, with cheaper domestic and Mongolian coal increasingly competing with Australian exports.
Hi guys,
DBI: Plenty of analysis around including MM on this infrastructure stock and I have owned it for 6 years so very happy with price growth and annual distributions. What I was interested in is your thinking for 2031 – the reset year for all their 11 customers. I am trying to get my head around whether the negotiations at that forward time are likely to be positive, super positive, negative or just ho-hum for impact. Broker coverage seems negligible on this important timeline. My current thinking is that their customers are sort of locked in by geography of their mines and the DBI terminal. Were they to change coal handling terminals I suspect (but don’t really know) that extra freight costs will weigh heavily. And is DBI charge per tonne more, less or similar to potential infrastructure rivals? Any thoughts you have on this aspect of DBI gratefully appreciated to firm up whether I add to my current holdings.
WHC -2.71%: FY26 numbers were understandably softer, with lower coal prices driving earnings down, but we think looking in the rear-view mirror misses the more interesting part of the story. FY27 should benefit from cost initiatives, improved rail pricing and materially lower financing costs, while the company is again buying back stock.
If you were to build a portfolio of 5 ASX resources stocks (across base metals, precious metals and energy) what would be your highest conviction picks right now and why. Can be large cap and small caps.
