Title: Friday POW! — A (Black) Diamond In The Rough Show: Haymaker Substack — Friday POW! (written post, paid) Author: David Hay / The Haymaker Team Date: 2026-07-24 URL: https://haymaker.substack.com/p/friday-pow-78e Note: Written post — no timestamps; text verbatim. Chart/image placements are shown in square brackets where the post embeds a Bloomberg or tankermap.com visual. Standard Haymaker legal disclosure block omitted.
A (Black) Diamond In The Rough
It's no exaggeration to say that the last few months have been extremely rough for humanity's first high-density energy source that was once known as "black diamond". That would be coal and it was supposed to be going the way of the dodo bird by now.
Instead, global coal usage has increased by approximately 65% in the 21st century. Even over the past decade, worldwide coal consumption has risen, albeit at a slow clip. This was not supposed to happen.
As we're previously written, we've been wary of positively highlighting coal stocks because of the exceedingly polluting nature of what they produce. We've particularly steered clear of the thermal variety – i.e., coal that is used to generate electricity – versus "met coal" which is employed in steel production. Warrior Met Coal (HCC) was a most profitable example of the latter for any Haymaker subscribers who followed our lead on that name back in January of 2025. It subsequently soared by ~51%, despite having corrected by 20%. It was a strong buy from our great source of intelligence on energy opportunities, the oft-mentioned Trader Ferg. (Thanks again, Ferg!).
We also gave a heavily qualified tout to Peabody Energy (BTU) back on March 24th, 2025. BTU primarily produces thermal coal which is more environmentally unfriendly, hence the reason for our equivocal recommendation to buy it when it was trading near $13. It went on to triple from there. However, since March it has come down very hard, to the $22 vicinity. That's still a nice gain and we had suggested partial gain-harvesting when it was just under $24.
As most readers are hopefully aware, in Monday's Portfolio Update we re-recommended two Australian coal producers we had previously highlighted. One, Yancoal (American Depository Receipt, ADR, symbol YACAF) has been a dud. That's not surprising considering the group's recent weakness as reflected by HCC and, especially, BTU. The other is New Hope Corp (ADR symbol, NHPEF) and, fortunately, it has hung in there admirably well. In fact, it hit a three-year high as recently as last month. Yet, even NHPEF has eased about 12% lately.
Here are the stock charts for both (our Bloomberg connection is out as we prepare to publish- so please be aware YACAF is now up to $4.25):
[YACAF Five-Year Price Chart — Bloomberg] [NHPEF Five-Year Price Chart with three-year resistance displayed — Bloomberg]
We wanted to get the buy-up recommendation out to you ASAP based on the latest development in the Middle East. Those pose an escalating threat to liquefied natural gas (LNG) shipments to Asia. LNG competes directly with coal in terms of electricity production, in many countries including China, India, and Japan. Note that the first two have a combined population of roughly three billion!
We felt this week might see a rally in these two Aussie coal producers and we were half right: YACAF has popped about 10%, but NHPEF is flat. That makes some sense because the YACAF was slammed much harder in recent months than NHPEF.
Ferg shrewdly preferred NHPEF earlier this year. Yet, at Yancoal's ultra-depressed current price we believed it deserves to be bought or, if you did so on our original write-up, re-bought. At this point, perhaps you might lean toward NHPEF but we like both of them… a lot.
Here are their valuation charts:
[Yancoal Five-Year Price/Sales and P/E — Bloomberg] [NHPEF Five-Year Price/Sales and P/E — Bloomberg]
At this point, YACAF is obviously trading much cheaper than NHPEF. As you can see, that's often the way they roll.
Actually, both would look considerably more inexpensive on a trailing five-year basis had revenues not spiked in 2022 and then rapidly retreated back down after the 2022 Russian attack on Ukraine. Taking that into account, both would appear cheaper than they do on a five-year look-back basis.
Unsurprisingly, coal prices did a swan dive since they went vertical in 2022. This was due to the rational belief Europe was facing an existential natural gas and LNG shortage back then. Because natural gas/LNG and thermal coal trade in concert, it was totally logical for coal prices to rocket.
As you can see in the price charts shown above, both YACAF and NHPEF had strong rallies earlier this year due to the outbreak of the war against Iran. This is similar to what happened with energy shares. The recent swoon was also connected.
The cause for this wind shear was the widespread belief, which Haymaker readers know we took strong exception to, was that there would be a lasting peace in the Middle East as a result of the Memo of (Mis)Understanding. Similarly, the consensus was that the Strait of Hormuz was open for business and would soon return to normal shipping activity.
For a brief time, this looked to be the case. LNG carriers, long trapped in the Persian Gulf, began to move out. This led to unfounded hope that Asia's and Europe's intensifying shortage of LNG would significantly abate. Instead, per the following visual, all product shipments have once again fallen off a cliff.
[tankermap.com visual]
As Ferg recently pointed out, thermal coal is about as inexpensive as it has ever been relative to LNG. With LNG prices once again ripping, that is likely to pull up thermal coal prices, particularly with unusually hot weather hitting both Europe and China. (It's fair to point out LNG prices were much higher in 2022… so far.)
[Bloomberg chart]
Of course, it is always scorching in India this time of year and it has become a significantly bigger coal importer in recent years. Further aggravating the situation, not that it needs to be, Indonesia is materially reducing its coal exports. This is far from a trivial development due to the fact it is the world's largest exporter of thermal coal.
We readily concede that many investors have a hard time buying coal stocks. If those are on your do-not-buy list, we totally understand. Yet realize how dire the energy shortage has become for a massive slice of the world's population. We'd argue it's worse than it was a few months ago due to how much emergency reserves have been drawn down. Countries in Europe and Asia are likely to soon be in desperate need of adequate coal supplies. When it comes to environmental considerations vs keeping the lights on, not to mention the air-conditioning, there's not much of a contest.
Ergo, we advocate dollar-cost-averaging into these two leading coal producers. We particularly love what a lonely stance this is… similar to our extremely against-the-grain aggressive buy on oil at the end of June.
The Haymaker Team