Namzes Cycles
Hurst Cycle & Technical Analyst, Commodities/Crypto/Equity Indices, Risk Management Background
Coal stocks are setting up for several quarters of upside as a new cycle gets under way. After a deep pullback the group is due at least a 40-week cycle low and is within the timing of an 18-month low; April 2025 was likely the 4-year low. CONSOL, Whitehaven and Warrior Met have broken downtrends, and Peabody and others should follow; confirmation needs a downtrend break and a higher weekly low. The aftermath of the half-year Hormuz closure should also benefit thermal coal. x.com
Whitehaven Coal looks bullish, though its gains could all get taxed away in Australia. A post the author replies to estimates about 13 mtpa of equity thermal coal sales from its New South Wales assets should run near A$2 billion of EBITDA at current prices, against an enterprise value of about A$8.5 billion. x.com
Thermal coal demand keeps surprising to the upside, supporting Glencore, Core Natural Resources, Whitehaven Coal and Yancoal Australia. Per a chart of IEA forecasts, global coal demand is running about 1 billion tonnes, roughly 9%, above what the agency expected only five years ago, a miss equal to the combined annual demand of the EU, Japan and the US. x.com x.com
Glencore's progress on selling Kazzinc and a DRC stake, alongside monetisation of BG shares, adds to its investment case. Copper output is within range, marketing EBIT tops $5bn, and its ASX listing and signs of life in coal leave the stars lining up. x.com
AI needs watts, not just chips, and that is reviving demand for coal producers such as Peabody, Warrior Met Coal, Alliance Resource Partners and Core Natural Resources. Coal plant retirements are being reversed across the US to keep data centers running, the DOE has over 300 requests for new data-center sites, and renewables and nuclear cannot scale fast enough. x.com
Peabody Energy should benefit because the world needs coal, alongside natural gas and other sources, to power data centers. Coal remains one of China's main sources of energy, and the stock has built a really nice, big base. x.com
Crude oil now has more room to fall on a deal headline than to rise on the status quo, as Trump's rejection of Iran's seven-day Hormuz plan looks like a negotiating position, with negotiators due back this week and the Saudi foreign minister in Washington. The closed Strait put Brent back at $108 with Nov–Dec backwardation near $8. Speculators added shorts three weeks running, squeeze fuel above $100 if talks fail; a deal would leave about 101,828 contracts of net length as supply. x.com x.com
CF Industries is in prime position as long as the Strait of Hormuz stays disrupted and Henry Hub natural gas prices stay benign. Fertilizer names are worth doing the work on, even after their run-up. x.com
Baofeng Energy benefits from the Iran war: with oil above $100, Chinese coal-to-olefins and coal-to-methanol gain a widening cost edge over naphtha routes, while a Hormuz blockade cuts off Iran's large methanol exports. Domestic coal-chemical producers capture both the oil spread and the supply gap. Per Goldman, crude trades on geopolitical risk premium, with Brent swinging between $95 and $110 as Axios reports Pentagon plans to seize Iranian islands. A ceasefire would reverse this. x.com
CF Industries, Nutrien, Mosaic and ICL Group are poor long-term holdings despite surging 10-30% on the Hormuz-driven urea spike. Fertilizer shares Maersk's flaws of cyclicality, weak capital allocation and no economic moat, and amplifies them. Demand follows farmer budgets: when crop prices are high farmers splurge on inputs, and when crops fall they cut back. Urea's 80% jump to $730 a ton reflects a supply shock as Gulf exports are cut off, not a durable advantage. x.com
Crude oil has a fundamental top in process because Middle East shipments are almost back to pre-Iran-conflict levels while Iran cannot sustain the conflict economically. Shipments from Kharg Island, which carries Iran's own exports, have collapsed. x.com
