Overview: VanEck’s natural resources investment strategy spans the breadth of raw materials commodities sectors, and the coal and consumable fuels sub-sector can play an important role. Not least, the global steel industry is dependent on coal. Metallurgical coal is essential to the steel making process with approximately 70% of the steel produced today using coal as a primary raw material. Metallurgic coal is also called “coking” coal because it is used to create coke, an irreplaceable input for steel production. Coking Coal Rally Driven by Supply Constraints
By the end of September, metallurgical coal prices had climbed more than 100% since the beginning of the year.1 The overwhelming driver behind this price recovery has been restriction in supply. In addition to both lower seaborne and domestic supply, inventories are also at multi-year lows. Although our view is that current prices are not likely to hold, we do foresee a continuation of a market environment that will be supportive of higher prices.
What is Metallurgical Coal?
Global steel production depends on coal. Metallurgical coal, or coking coal, is used in the process of making steel, and hence is often referred to as “steel making coal”. Coking coal is heated to about 2,700° F (1,100° C) in a coke oven, forcing out impurities to produce coke. Coke itself is almost pure carbon. Because of its high thermal energy and dearth of impurities, coke is used to convert iron ore into molten iron. This is then used to make a range of steel types.
Global Demand is Solid
Over the past three years, global demand for coking coal has been relatively solid at an annual level of around 990 million tonnes (Mt). China is one of the most important consumers in terms of setting prices, since it accounts for approximately 60%, or 590Mt, of global coking coal demand. It is followed by Japan at 69Mt, India at 49Mt, and South Korea at 40Mt. Demand from the U.S. is for about 21Mt per annum.
China has invested heavily in its steel industry and currently accounts for approximately 55% of the world’s steel production. The net result of this is that domestic Chinese coking coal supply has had to be supplemented by imported, or seaborne coal (Chart A). “Seaborne” refers to coal that is transported internationally overseas by ship, and refers mostly to the coking coal export market.
Chart A: Chinese Seaborne Coking Coal Demand and Steel Production
Yearly in Tonnes: 2000-2016
(click to enlarge) Source: VanEck, Bloomberg, World Steel Association, Australian Bureau of Statistic, Statistics Canada, and Chinese General Administration of Customs, as of 9/30/16.
Coking Coal Supply: The Seaborne Market and the Domestic Market
The global coking coal market is generally considered as being split between the seaborne (or export market) and the domestically traded market.
The Seaborne Market
The size of the global seaborne coking coal market was approximately 290Mt as of 2015 (Chart B). Despite being a much smaller market than the domestically traded coal market, the seaborne market is actively traded and, therefore, regarded as the price/trend indicator for all contracts.
Australia, the U.S., and Canada are the key suppliers of coking coal to the seaborne market. Seaborne supply reached record levels in 2014 as shown in Chart B. However, supply fell 8% in 2015 as producer profitability decreased, balance sheet quality deteriorated, and capital spending contracted. In 2016, supply has collapsed even more dramatically, and on an annualized basis, 2016 seaborne supply could be as low as 185Mt, or down 37%, a level last seen in 2004.
Chart B: Global Seaborne Coking Coal Supply
Yearly in Tonnes: 2000-2016
(click to enlarge) Source: VanEck, Bloomberg, Australian Bureau of Statistic, Statistics Canada, Chinese General Administration of Customs, and U.S. Census Bureau, as of 9/30/16.
The U.S. has had the largest impact on the shrinking supply to the seaborne market. Over the past three years, U.S. coking coal exports have fallen consistently, driven by subdued prices, lower margins, and/or restrictive environmental policies (Chart C). U.S. exports peaked at about 70Mt in 2012, but since then they have contracted by nearly 42% and 2016 exports are estimated at 40Mt. The export decline has been particularly pronounced over the past twelve months, a period in which 20Mt in capacity was lost.
Chart C: U.S. Coking Coal Exports
Quarterly in Tonnes: 2000-2016
(click to enlarge) Source: VanEck, Bloomberg, and U.S. Energy Information Administration, as of 9/30/16.
The Domestic Market
Domestic coking coal markets have also seen a dramatic reduction in supply. In 2016, China made a fundamental shift and implemented supply-side reforms in the domestic coal industry to curb overcapacity. In short, the reforms reduced the number of statutory working days for coal miners from 330 to 276. By mid-2016, in China, year-on-year production was down 20%, and in the coking coal-rich Shanxi province it was down 25% to 30%. As a result, because of lower supply and relatively solid demand, coking coal inventories in China are currently at multi-year lows.
Our Positive Outlook for Coking Coal
Current physical market conditions remain very tight. We believe that just as low prices have resulted in reduced supply, higher prices should lead to increased supply. At current spot market prices, virtually every tonne of seaborne coking coal will be cash positive.
While we do not expect current prices to hold, we do foresee a strong and supportive market that will keep prices higher than the current contract price (around $92.50 per tonne). This outlook is supported by a number of different factors. In addition to the fact that 70% of deals are executed by coking coal end-users and not traders, some 80% of concluded transactions were in Asia. On top of this, not only are coking coal inventories at coke plants at their lowest levels on record, demand for steel is also expected to remain solid. Taken together, we believe these factors provide a solid base for firm prices going forward.
AUTHORED BY
Charl Malan Senior Analyst ________________________________________ Senior Analyst for the Natural Resources Equity strategy; specializes in Base and Industrial Metals; also serves on the investment team for the Gold Equity strategy Investment Management Team member since 2003 Prior to joining VanEck, an equity research sales analyst specializing in South African mining, natural resources, and financial sectors at JPMorgan Chase; actively involved in the merger of BHP Billiton/SAB Miller and unbundling of Iscor Steel/Kumba Resources as well as capital raisings and NYSE listing of Harmony Gold, Gold Fields, and Telkom SA Previously an equity research analyst and junior portfolio manager at Standard Corporate and Merchant Bank, Asset Management (South Africa); developed and applied various fundamental and quantitative models within the natural resources, mining, and consumer sectors; established an equity research department and managed Standard Corporate and Merchant Bank, Asset Management (Namibia) Media appearances include ROBTv; quoted in The Wall Street Journal, Barron’s, Forbes, CNBC, and The Financial Times, among others; also featured in mining journals such as miningmx, Mining Journal, and Resource Investor MBA, University of Stellenbosch (South Africa); Honours in Business Administration, University of Stellenbosch (South Africa); BA, Arts, University of Pretoria (South Africa)
IMPORTANT DISCLOSURE
1 Source: Bloomberg. Data as of 9/30/16 is based on the TSIPPCAE Index: Premium Hard Coking Coal Australia Export (FOB East Coast port) USD/tonne. This price index is compiled by The Steel Index Ltd (TSI), and it represents the volume-weighted average of actual transaction price data submitted confidentially online to TSI by companies operating within the relevant supply chain, including buyers and sellers, based on their latest sales and/or purchases within this product category. An index’s performance is not illustrative of a Fund or strategy’s performance. Indices are not securities in which investments can be made.
Michael Saylor’s bold Bitcoin bet and Strategy’s risk analysis
Bitcoin price technical analysis: Where are the liquidation levels?
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Michael Saylor’s bold Bitcoin bet and Strategy’s risk analysis
Strategy (formerly MicroStrategy) has amassed a staggering $43 billion in Bitcoin, positioning itself at the forefront of the corporate “reserve race.” Under the leadership of Bitcoin maximalist Michael Saylor, the company now boasts an $84 billion market cap. But with such an aggressive strategy, how sustainable is its approach—and what risks lie ahead? We break it down in today’s analysis.
Bitcoin price technical analysis: Where are the liquidation levels?
A drop below $72,000 could flush longs, while a breakout above $90,000 may squeeze shorts. One key positive indicator is that Bitcoin continues to print higher lows since March 10, which preserves a bullish market structure in our view. Dive into our technical analysis.
What are real-world assets and why do we need tokenization?
Imagine owning a slice of a skyscraper or a piece of fine art with just a few clicks. Tokenization, the act of converting ownership rights to real-world assets (RWAs) into tradable tokens, has surpassed $10 billion in on-chain value, unlocking global 24/7 access to once-exclusive markets with liquidity, efficiency, and yield. Find out how it works.
Research Newsletter
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
Invesco BulletShares 2030 EUR Corporate Bond UCITSETF EUR Acc (BSE0 ETF) med ISIN IE000I25S1V5, försöker följa Bloomberg 2030 Maturity EUR Corporate Bond Screened-index. Bloomberg 2030 Maturity EUR Corporate Bond Screened Index följer företagsobligationer denominerade i EUR. Indexet speglar inte ett konstant löptidsintervall (som är fallet med de flesta andra obligationsindex). Istället ingår endast obligationer som förfaller under det angivna året (här: 2030) i indexet. Indexet består av ESG (environmental, social and governance) screenade företagsobligationer. Betyg: Investment Grade. Löptid: december 2030 (Denna ETF kommer att stängas efteråt).
Den börshandlade fondens TER (total cost ratio) uppgår till 0,10 % p.a. Invesco BulletShares 2030 EUR Corporate Bond UCITSETF EUR Accär den billigaste och största ETF som följer Bloomberg 2030 Maturity EUR Corporate Bond Screened index. ETFen replikerar det underliggande indexets prestanda genom samplingsteknik (köper ett urval av de mest relevanta indexbeståndsdelarna). Ränteintäkterna (kupongerna) ackumuleras och återinvesteras.
Invesco BulletShares 2030 EUR Corporate Bond UCITSETF EUR Acc är en mycket liten ETF med tillgångar på 6 miljoner euro under förvaltning. Denna ETF lanserades den 18 juni 2024 och har sin hemvist i Irland.
Produktbeskrivning
Invesco BulletShares 2030 EUR Corporate Bond UCITSETFAccsyftar till att ge den totala avkastningen för Bloomberg 2030 Maturity EUR Corporate Bond Screened Index (”Referensindexet”), minus avgifternas inverkan. Fonden har en fast löptid och kommer att upphöra på Förfallodagen.
Referensindexet är utformat för att återspegla resultatet för EUR-denominerade, investeringsklassade, fast ränta, skattepliktiga skuldebrev emitterade av företagsemittenter. För att vara berättigade till inkludering måste företagsvärdepapper ha minst 300 miljoner euro i nominellt utestående belopp och en effektiv löptid på eller mellan 1 januari 2030 och 31 december 2030.
Värdepapper är uteslutna om emittenter: 1) är inblandade i kontroversiella vapen, handeldvapen, militära kontrakt, oljesand, termiskt kol eller tobak; 2) inte har en kontroversnivå enligt definitionen av Sustainalytics eller har en Sustainalytics-kontroversnivå högre än 4; 3) anses inte följa principerna i FN:s Global Compact; eller 4) kommer från tillväxtmarknader.
Portföljförvaltarna strävar efter att uppnå fondens mål genom att tillämpa en urvalsstrategi, som inkluderar användning av kvantitativ analys, för att välja en andel av värdepapperen från referensindexet som representerar hela indexets egenskaper, med hjälp av faktorer som index- vägd genomsnittlig varaktighet, industrisektorer, landvikter och kreditkvalitet. När en företagsobligation som innehas av fonden når förfallodag kommer kontanterna som fonden tar emot att användas för att investera i kortfristiga EUR-denominerade skulder.
ETFen förvaltas passivt.
En investering i denna fond är ett förvärv av andelar i en passivt förvaltad indexföljande fond snarare än i de underliggande tillgångarna som ägs av fonden.
”Förfallodag”: andra onsdagen i december 2026 eller sådant annat datum som bestäms av styrelseledamöterna och meddelas aktieägaren
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.
Since President Trump appointed Mark Uyeda as acting SEC chair two months ago, many investigations into crypto businesses have been dropped, as the SEC moves away from regulation by enforcement and works to create a framework for digital assets. As regulations become clearer and news flow turns more positive, crypto prices—which dropped sharply this week—should begin to better reflect the new regulatory landscape in the US.
We believe this regulatory shift could ultimately help trigger the next leg of the current bull run, as investors better understand the significance of regulatory clarity and seek to acquire bitcoin and altcoins at what we believe are currently very favorable levels.
Market Highlights
SEC Dismisses Crypto Enforcement Actions
The SEC dropped its enforcement actions against crypto-related companies Kraken, Consensys, and Cumberland DRW.
This indicates a shift in SEC’s regulatory approach, favoring clearer guidelines over enforcement actions. Such a pivot could foster a more predictable environment, encouraging innovation within the sector.
Banks to Engage in Crypto Activities
The FDIC has rescinded previous guidelines which prevented financial institutions from engaging with crypto activities without prior sign-off.
By removing bureaucratic hurdles, banks may more readily offer crypto-related services, potentially leading to broader adoption and integration of digital assets.
Bitcoin ETFs Inflow Streak Surpassed $1 Billion
US spot Bitcoin ETFs have recorded a 10-day inflow streak exceeding $1 billion marking the longest such streak in 2025.
This underscores growing institutional and retail investor confidence in Bitcoin as an asset class that helps increase market stability and possibly paving the way for the approval of other crypto-based financial products.
Market Metrics
All NCITM constituents had negative performance last week, with XRP (-10.8%) and UNI (-10.7%) seeing the steepest declines. ETH also experienced a sharp drop (-9.1%), contributing to NCITM’s underperformance relative to BTC (-2.9%). The NCITM -4.2% decline reflects a broader risk-off sentiment in the crypto market, as investors reassess their positions amid ongoing macroeconomic uncertainties.
NCITM (-4.2%) extended its underperformance last week, deepening year-to-date losses. Traditional indices like the S&P 500 (-1.5%) and Nasdaq 100 (-2.4%) saw smaller declines. The gap between crypto and other risk assets continues to widen, while gold has emerged as the top performer in 2025, gaining nearly 20% amid ongoing macroeconomic uncertainties. This trend highlights a growing risk-off sentiment, with investors shifting toward defensive assets and away from high-volatility investments.