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Yancoal, Whitehaven shares spike on record coal prices

Yancoal

Shares in Australia’s biggest coal producers have jumped in the past week as uncertainty hits global commodities amid Russia’s invasion of Ukraine.

Countries and jurisdictions across the world have imposed trade-related sanctions on Russia, temporarily shutting the door on a mining juggernaut.

The ripple effects of this are already being seen in Europe, with Italy and Germany (two countries reliant on Russian gas) considering reopening shuttered coal plants to cope with an energy shortage.

This comes as Germany halted certification of the new Nord Stream 2 natural gas pipeline which was set to double the country’s gas supply from Russia.

At the time of writing, Yancoal shares had jumped 72 per cent to $4.78 across the previous five days, stocks in Whitehaven Coal had jumped 39 per cent to $3.92 in this time, while New Hope Corporation was positioned 24 per cent higher ($2.96).

At the same time, the Newcastle coal price broke through the $US400 ($548) per tonne barrier for the first time ever this week.

According to Wood Mackenzie, turning off the Russian coal tap could have global ramifications.

“Having to replace Russian coal volumes would result in a price shock to global coal markets and a coal shortage in Europe,” WoodMac said this week. “Russian coal accounts for roughly 30 per cent of European metallurgical coal imports and over 60 per cent of European thermal coal imports.

“The primary issue with replacing Russian coal exports in Europe is its reliance on Russia’s particular quality of coal.”

Oil prices have also been affected, with global benchmark Brent crude reaching near eight-year highs of $US113.94 per barrel this week.

Nickel prices have raced to an 11-year peak while aluminium prices have scaled to record highs. Russia is a prominent supplier of each of these commodities.

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