Centennial Coal Company Ltd says the economic slowdown will have a limited effect on its forecast export sales, with demand for thermal coal underpinned by customer need to secure energy supply.
Chairman Ken Moss told Centennial's annual general meeting in Sydney on Thursday that more than 80 per cent of thermal coal was used for electricity generation, so its fundamentals differed to metallurgical coals, which were used almost entirely by the steel industry.
Dr Moss said the NSW-based company, the largest supplier of thermal coal to the domestic power market, had received enquiries from customers seeking additional coal over and above contracted levels as they sought to ensure security of supply.
He said the company's existing domestic contracts were "likely to be replaced with a new generation of domestic contracts" as they expired, "providing a regular low-risk cash flow stream and free from the vagaries of the Australian dollar/US dollar exchange rate".
I'd be interested what you opinion on CEY is Caliente? I favour CEY over MCC, GCL, FLX etc. for the very reasons mentioned in this article.
Cheers, Pandelis
CEY Price at posting:
$2.32 Sentiment: Buy Disclosure: Held
