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Parth Khandelwal's avatar

Seriously great, I agree with this

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Ansh Patel's avatar

Can’t wait for part 3, this write up is amazing

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Dave's avatar

Great article! Excited for pt. 3

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The Whatever Investor's avatar

The Whitehaven presentation coupled with chatgpt worked wonders to help my understanding of this. Great article, helped tremendously

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Adam Ritzer's avatar

What do you think of the BTU/Anglo deal?

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Gaurav's avatar

I left a comment on Reddit

https://www.reddit.com/r/ValueInvesting/comments/1fryj8n/comment/lpq3oej/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button

I would like to understand the basis of this opinion-

>Meanwhile, electric arc furnaces are unlikely to replace traditional blast furnaces in the coming decades, as most new steel production capacity will comprise blast furnaces.

as far as I can tell, the general trend is that steel manufacturers are moving to EAF method which doesn't use coke. If you don't believe me, look for top 10 steel makers ex-China and go through their earning calls and see how many of them are capex-ing on EAF. You will find many.

another tidbit from https://www.steel.org/steel-technology/steel-production/

> The use of EAFs has expanded and now accounts for over 70 percent of steel production in the United States

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Idea Hive's avatar

I would refer you to the first article on the metallurgical coal industry where I discuss the EAF risk. In summary, the largest metallurgical coal consuming/importing countries, India and China, while investing in EAF capacity, will continue to rely heavily on traditional blast furnaces for the coming decades. The same can be said of the Southeast Asian economies. Please refer to the chart showing expected steel production capacity by type (BF vs EAF) in the 'Electric Arc Furnaces' section of the article.

https://ideahive.substack.com/p/exploring-the-met-coal-industry-part

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Cesar Feys's avatar

What an amazing analysis. Whoever wrote this has done his/her due diligence. I am extremely grateful for the existence of this write-up.

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Alexander Fernandez's avatar

Really insightful analysis — I appreciate how you’ve broken down the met coal cycle with such depth, especially by highlighting the importance of swing producers like AMR in setting the floor for prices. The historical perspective on price bottoms aligning with the 90th percentile cost curve makes a compelling case that we could indeed be near a cyclical low right now.

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