A resources executive predicted unprecedented fossil fuel valuations could keep breaking records in the New Year.
New Hope Group believes thermal coal prices will continue to soar above US$440 (A$648) a tonne well into 2023. There is even a chance the commodity could be worth as much as US$500 (A$751.80) a tonne sometime in the next six months due to the global coal shortfall caused by Russia’s ongoing border conflict with Ukraine.
“It has been consistently over US$400 (A$601.82) a tonne for a couple of months now and our view is that it is looking to go up further, as the winter in the northern hemisphere takes full effect,” New Hope CEO Rob Bishop said according to News Limited.
“Whether you see a five in front of it is hard to say but it is definitely going to stay in the fours for longer, and possibly for the best part of six months – and maybe even longer. Even if you look at the 2024 calendar year futures you are looking in the US$300s (A$451.34) per tonne.”
These high commodity prices significantly bolstered the group’s bottomline. The company reported a $983 million net profit after tax in the 2022 financial year, representing a 1144.3 per cent increase on fiscal 2021.
“The company’s long-term strategy is to remain focused on coal, both through its existing thermal portfolio and in new opportunities in either metallurgical or thermal coal production – which will provide … strong cash generation and consistent returns,” Bishop said in a public statement.
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