Whitehaven Coal points to green shoots despite price slump

“With future savings targets identified and coal markets rebalancing in response to demand signals we are optimistic about achieving stronger outcomes through the second half,” he said.

Seaborne thermal coal markets “continue to rise” from the low points experienced in August amid supply curtailment and increased energy demand in Asia, Whitehaven said.

While Whitehaven does not have direct exposure to China, Beijing’s decision to ban Australian-sourced coal amid diplomatic tensions between Canberra and Beijing was affecting the seaborne coal market.

The miner said Asian steel-making activity outside of China was continuing to improve amid economic stimulus programs, and Australian coal was now finding customers in other destinations, including Pakistan and the Middle East.

“Instead of being delivered to China, Australian coal is now finding customers in alternate destinations including India, Pakistan and the Middle East, and traded coal historically delivered into these markets is finding its way into China,” the miner said.

“Prices for Australian origin metallurgical coal were weak through the December quarter however have sharply increased in recent weeks,” it added.

Due to the significant fall in coal prices, the board did not declare an interim dividend.

Whitehaven’s subdued numbers come after the world’s biggest miner, BHP, this week also posted a sharp revenue slide in its coal business. The company flagged $US2.2 billion in write-downs, including on the value of its thermal coal mines in New South Wales and Colombia, amid the worsening global outlook for coal.

Whitehaven’s shares initially slipped more than 9 per cent on the back of its numbers but recovered during the session to close 1.26 per cent weaker at $1.56.