The Worst Commodity of All

Today, we’re talking about the most vile of commodities…

A resource that’s undone governments after they miscalculated the universal hatred for this single commodity.

Something so despised that it’s become bad form to even mention the word in public.

Of course, I’m talking about coal.

I go to a few mining conferences each year, and occasionally, you’ll see a coal company at one of the stands in the meet-and-greet areas of the conference hall.

Usually, the coal company is placed far away from the centre of these events… Sitting in a quiet, awkward corner, usually with a sombre-looking director at the helm.

But sometimes these coal companies have ‘green-washed’ their titles, cutting out the word ‘coal,’ and substituting it for ‘energy.’

That sometimes causes a bit of confusion; an unsuspecting attendee stumbles into a conversation with one of these coal directors.

But with a few lines of questioning, it soon becomes clear that this is just a dirty, filthy coal company.

And so they shuffle on, looking behind them to make sure no one noticed them at the stand.

The Ugliest Duckling

The first time I recommended a coal company to my paid readership group, I had to take a deep breath.

A lot of investors like the sharp edge of a critical metal stock, one that has a neat supply-and-demand dynamic, usually tied to some great need in technology.

Few have much appetite for a morally bankrupt commodity like coal.

But here’s the thing….

Without coal, the global economy is stuffed.

Any doubt that we don’t need coal was put to bed earlier this year after oil flows halted from the Strait of Hormuz.

Coal has been the ballast for the global economy.

A commodity that has been fit-for-purpose as oil and gas supplies ran short. It stabilised what could have become a runaway energy crisis.

Without coal, many more cities would have gone dark, leading to mass hospital closures, civil unrest, and no doubt, deaths.

Coal hasn’t just stabilised the global economy, it has saved lives!

And now, buyers want more of it.

Tracking the Coal Trade

So, how do you know whether demand is simply temporary or shifting towards a long-term trend that supports higher prices?

Well, most commodities move via shipping… From the supplier to the buyer.

As someone who closely watches commodity markets, I keep an eye on global seaborne movements of various resources, including coal.

When the volume of shipments rises, demand is obviously robust.

Sometimes, that can offer a useful clue for gauging a market’s future strength, regardless of official prices.

How so?

Well, the prices of hard commodities are typically set by trading houses like the London Metal Exchange or the Shanghai Exchange.

But the thing is, only a small fraction of that physical commodity actually passes through these official outlets.

That makes commodity prices far more opaque than many investors would assume.

So, with that in mind, how does
the coal story look right now?

Not surprisingly, strong.

According to the various tracking firms I follow, global seaborne coal flows increased by 6% year-on-year in May 2026.

That was up from 4% year on year, compared with the previous month.

Meanwhile, shipments from Indonesia, an important global coal supplier, fell 5% year on year in May. Also, each month in 2026 has seen a steady decline in Indonesian coal flows.

Bottom line: as oil and gas supply from the Middle East remains constrained, more countries are turning to coal to fill their energy supply gap.

But is this just a temporary trend?

That’s the conventional wisdom… Once the war ends, demand for coal will plummet.

But I view coal differently; you see, the longer the war in the Middle East lasts, the more countries will become entrenched and reliant on coal-based power generation.

Systems are adapting, and so far, coal has been the clear winner as countries turn to an easy, cheap, fit-for-purpose commodity that comes with LESS geopolitical vulnerability.

Coal is winning in the energy race.

Most think that this will be temporary, but what if it isn’t?

Is coal entering a new era of long-term demand growth? That’s certainly an idea worth keeping in mind.

And with that, you might be interested in seeing how I use these techniques for managing our model portfolio at Diggers & Drillers.

Something that led me towards recommending coal stocks to my paid readers well before the energy crisis unfolded earlier this year.

You can find out more here.

Until next time.