Following recent good runs on fuel shortage fears due to the war on Iran, coal shares were under pressure on the JSE on Wednesday, with Thungela and Exxaro slipping as investors assessed their prospects in the wake of their recent results and broader energy sector headwinds.
Thungela fell as much as 9.4% in afternoon trade, making it one of the day’s weakest performers, while Exxaro was down 5.1% at its intraday worst.
After recent rallies, coal prices eased as energy stocks retreated, with Brent crude down about 6% following signs of a potential easing in the Iran conflict and talks of possible negotiations that could lead to a ceasefire, along with reports that the Strait of Hormuz could reopen for certain shipping traffic.
The situation, however, remains volatile. Iran has said it will not accept a partial ceasefire, only a full end to the war, and missile exchanges continue. While talks and planning for negotiations are under way, real relief for energy markets will come only with an actual agreement.
Thungela’s recent annual results showed a swing to a R7.1bn loss, driven in part by a hefty asset impairment and a sharply reduced final dividend. As a pure coal producer, it remains particularly sensitive to commodity prices, export logistics and currency fluctuations.
Exxaro, by contrast, has benefited from stronger recent earnings, a firmer dividend and growing diversification into resources such as manganese and renewable energy, which have helped to cushion its share price relative to Thungela.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.