Semirara Mining and Power [SCC 34.70, down 0.9%; 42% avgVol] [link] shipped 16.5 million metric tons of coal in FY24 (+4.4%), which is a new all-time record for the company. SCC attributed the surge in shipments to “stronger demand from China and domestic markets”, with both foreign and domestic shipments increasing by 4%. Foreign exports to China specifically increased 46% to 7.6 million metric tons (China accounts for 90% of SCC’s foreign shipments). SCC shipped 8.0 million metric tons domestically, with 20% of that going to cement plants owned by Cemex Holding Philippines [CHP 1.84, up 0.6%; 107% avgVol], which is an associate company to SCC.
MB bottom-line: SCC has had a good run of operations, but the market price of coal has been the key to SCC’s past success, and that key is not something that SCC can keep in its pocket. It’s something entirely external to SCC and its operations. While SCC said that it expects “market prices to further normalize in 2025” (that’s financial-speak for “move back to historical or long-term average levels”, and in this case, “historical or long-term average levels” are lower), shareholders will be pleased to see that most of the operational problems that plagued SCC’s production levels through the great coal price spike have been left in the past. Global coal consumption is projected to decrease in FY25 and FY26, with prices falling 12% per year. Coal prices could spike during extreme weather events (especially those in China), but prices could also be suppressed if other global coal producers (like the US or Indonesia) don’t have any supply interruptions.
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