That is true ......... but they need to be bought now, then. And how are you determining how much is bought at the futures prices, that is the critical question? It doesn't matter that the prices today are available at x, if they are available at lower y tomorrow, then companies will be purchasing at y tomorrow. It all depends on how many transactions at current prices are closed by end of today. And if this value is not significant, then it doesn't matter what the futures prices are today, it only matters what they are tomorrow, etc.
EdwardSeaton: Futures available a couple of months ago were over $300/ton well into next year. The futures prices can change on a dime. If the current price goes down to $200/ton, futures prices will follow. Watch them over the next few weeks ........ you'll see that the futures prices track the current coal price up or down.
fromage: what about the Dutch TTF gas price that is falling like a stone? About half of what it was a month ago. This underpins the coal price, not so? Thungela is definitely a lot less profitable at coal prices in the low $200/tone, which is where it may head ..........
EdwardSeaton : Yes, but Futures in September were over $300/ton well into next year, even end of next year (can't remember exactly, but at least until halfway through the year). I think it is not really feasible to rely on these figures - as we have seen recently, they can drop quickly, affecting all forward projections. I can tell you that if coal price drops to $150/ton soon (unlikely, but possible), all those projections into next year will probably drop to roughly the same value. I was calculating dividends in September "conservatively" based on $300/ton for the rest of the year .......... and look where we are a month later.
Just some realism. Personally, I would prefer the coal price to go above $300/ton again :) And I think it could as Northern Hemisphere Winter approaches ..........
Still, the rail strike is hammering the sp. This is the fundamental weakness with Thungela ......... any disruption to exports significantly impacts the share price, since a big driver for the share price is sales (duh, I guess, but there is only one avenue for export, no product flexibility and no variation in significant income streams) Of course, coal price is obviously another big factor, but that's not as big a problem at the moment ........ Transnet and Richard Bay export will hammer the sp, no matter what the coal price. And I think that there is no idea by investors on the length of the strike - this could go on for two or three weeks (hopefully only that long at max.!) And I think that the sp will steadily decline as long as the strike is on.
And even if the coal price starts improving as Winter approaches, Thungela will not be able to take advantage of this!! This was the reason (Transnet) that Thungela couldn't export their full capacity the last half year (7.8 million tons max. vs 6.4 million tons actual) at the $300+/ton coal price - dividend would have been a solid £3.65 (20% more) on a direct ratio ........
Let's see what happens. It's been a solid 18% drop from 1660 within a week so far - that is a big drop by any standards! I'm still holding my full investment, but I've lost a lot on paper!! Hopefully, the strike will be resolved and we'll soon see the same high levels that we experienced over the last few weeks .......
Holding thumbs for the winter effect .......... not so much for the war, although I'd prefer it not to end right now, because then Putin will get off too easy and Ukraine won't have retaken Donbas and Crimea .......
crawshaw: no need for the prickliness. I'm fully invested here and have been since October last year.
Maybe you should get a little perspective - nothing we say on here has any iota of effect on the sp - we really are not that important. Negative comments (true or untrue) have an effect on you (obviously), but sweet f*&^all on the sp,
Just because I'm trying to explain the drop (or getting an explanation for it) does not mean I've sold out or "trying to suppress the sp" (I always have a good chuckle when people trundle out this tired refrain ........). Whenever I see a significant and/or sustained drop, I'd like an explanation that makes sense, so I can make informed decisions in the future.
Still consistent downward pressure at the moment ....... could be coal price down to 284 and Dutch Gas TTF down to 175 ........ and a tentative market with inflation still creeping up ........... Ukraine seems to winning back a lot of ground, so maybe a further decrease in coal prices being predicted if Ukraine gets its coal production going ....... Europe at 90% gas storage capacity in preparation for Winter (which will last them until Spring, even if the Winter is cold, at current estimates) .......... Transnet rail/port strike still going ahead today, even though wage offer has been upped. Just throwing it all out there.
I have to say, no matter what the figures of the company say, it's sentiment that drives the market (even if it is wrong). Tomorrow, we could see an 8% increase, who knows? Let's see how the run-up to dividend payout goes ....... last time, the sp dropped by the pre-tax amount on dividend payout .......... that's £12.60 at current prices, if that happens again ........ Holding thumbs that the sp holds; after all, its a hang of a lot easier to reach £25 from £16 (56%) than it is from £12.60 (98%) :)
Good analysis, guys!
Still, the rail strike news is the cause of the day's drop, as far as I can tell. We will still recover and more, if your analyses are correct. But it's useful to know if you think there is another reason besides the strike for the day's drop.
Ouch .......... big impact on Thungela!
https://www.aljazeera.com/news/2022/10/4/south-africas-rail-port-workers-to-strike-this-week-over-wages#:~:text=Workers%20at%20South%20Africa's%20state,key%20minerals%20and%20other%20cargo.
As you say, gas prices up again, coal prices up again, no indication that sales are tapering off. Why would Thungela drop? People will probably say it's the general malaise in the market pulling Thungela down with it (my notifications on my share app inundated me with 52-week lows being hit today ........). But why should that affect Thungela? I thought that coal prices and volume of sales are the only things impacting Thungela. Are there further Transnet issues? Is there a decrease in demand I am not seeing? Anything else? Insights welcome! :)
(having said all this, did you see how Thungela recovered form 1491 to 1632 on Tuesday?!!! And late in the day, too. We could have another day like that .........)
Yup. I've said many times that I cannot predict this share price in the short term. We only find out days or weeks later what is driving it up or down. Go back to the last period around dividend payment ....... it bobbled up and down between 1150 and 1350, going up and down between these limits five times in four months, even though the prospects for a good dividend in Sep/Oct were only looking rosier and rosier as time went on. And it dropped both on ex-div as well as on payment day. Really? Was the first drop not accounting for most of the decrease in cash already?
Tiger79 : You watching Helium One as well?! What a farce. And the forums on LSE and Advfn are so vitriolic - people flaming and trolling each other - really rude and derogatory. Glad we don't have such puerile people on this forum!
But ....... definitely one to watch. It is a hype and lifestyle share, as far as I am concerned, but could make some good money on the frequent pump-and-dumps. I don't trust the board and think it may be a scam - things happening tie up with what I heard on a podcast from the Warren Irwin who made a few hundred million up and down (due to the huge scam that it was!) on Bre-X in the 90's
Anyway, a lengthy discussion for another board .........
diamondman : good point! Actually £3 down is 1541, taking the closing price on Wednesday of 1841. But remember, if one took the dividend, the effective price to work from is 1601 because the divi was £2.40, not £3 (for those who can't reduce the withholding tax of 20%). Much better, about 5% down on that. But the guys who sold out in the 1800s are in a great position now! Can increase their holding by a good 18% at current prices. Well done to them, I have to say. Even saw that some people sold at 1870 and 1890 - even better!
It is worrying. We have fallen from the heady heights of 1932 are already at 1500-odd - that's a solid 22% drop from the high or about 18% from the closing price that day. Europe is at 87.2% full on gas and I saw a recent analyst's report that said winter may be milder than expected. All puts pressure on the coal price. A World Coal Market overview end of last week stated that the current weakness in coal is due to the relaxing of EU sanctions on Russian coal to allow transfer by Europe to Third Party countries (alleviating some supply problems) and better performance by Transnet (really? So, it's better for Thungela sp that Transnet underperforms?!).
Anyway, a lot of relatively bad news for Thungela end of last week. Who could have imagined? 1932 (new high) on Wednesday just before dividend, then a bunch of negative news immediately after the dividend payout (that always causes a dip in sp) to compound the downward move. The timing of it!
Oh, well. I did say I can never predict the moves of this share :)