Digging deep
The stubborn coal industry
Good morning, hard-hat brigade. This is your Stock Market Rundown for August 22nd, 2023. Thank you for being a reader and hanging out with me. Let’s go:
TODAY’S TOP STORY: TURNING ROCKS INTO RICHES 🪨
BHP Group, the world’s biggest miner, just reported results that missed analyst estimates, due to a flagging economic outlook putting pressure on prices of the stuff they dig out of the ground, stuff like iron ore, copper, nickel—and coal.
Between Greta Thunberg’s crusade for green energy, and developing nations transitioning to renewables, you might’ve assumed coal is going out of style. But far from winding down, global coal production peaked in 2022, with 8 billion metric tons mined. And there are hundreds of new mines planned worldwide, spanning every scale from giant megaprojects to two guys with a shovel.
The International Energy Agency described coal demand as “stubborn”, with use surging in India and China even as it declines in the US and Europe. In fact, China’s coal industry accounts for a fifth of the world’s emissions—more than every car, train, ship and aircraft in the world combined. Yikes. Well, glad I did my part to fight pollution by using a paper straw.
As for developed countries, we’re trying to decarbonize, but kicking coal is like quitting your morning coffee… you might not think you’re addicted, but cutting it out will give you one hell of a headache.
Germany was aiming to shut down its polluting coal-fired plants, but had to flip the switch back on in 2022 after Russia turned off the taps on gas exports following the Ukraine invasion. Energy sovereignty for the win.
It’s dirty, it’s dangerous, and we can’t get enough of it: coal will continue to fuel the global economy for the foreseeable future… despite being as destructive to human health as chain-smoking Marlboros.
SO WHAT ELSE IS GOING ON?
IPOs are back, baby (cue wolf howl). While most stocks that went public in 2021 and 2022 are trading below their IPO prices, some recent successful deals are making investment banking great again.
Exit through the rear doors: electric bus maker Proterra just filed for bankruptcy. The company went public in 2021, but struggled to turn a profit. Urban commuters will have to keep inhaling diesel fumes.
Triller, a short-form video app which supposedly 450 million people use but I had never heard of before today, just filed to go public.
Beloved hangout of suburban dads Home Depot reported a weak quarter and forecast continued sluggish sales. During the panny, being stuck at home spurred many a home reno idea. But apparently everybody’s now done fixing up the backyard with wicker chaise lounges and interlocking tiles.
The Fed’s rate hikes have jacked up auto loans rates—they’re now at their highest point since 2007. Looking to save money? Pay cash and buy used when you upgrade your Ferrari.
That’s it for today, folks—let’s circle back tomorrow AM. Yours in capitalism, The Axe