Tom Westbrook

SYDNEY – While Asian coal shares were slightly lower Monday because of an international agreement on reducing coal use, tight supplies gave a stable floor to many stocks that have enjoyed huge gains this year.

The U.N. Climate talks ended in Glasgow on Saturday, with an agreement addressing fossil fuel usage. Following lobbying by India and other nations, wording was altered to make it more clear that the “phase down” is not the “phase out” approach.

The reality is that coal will be used in the coming decade. It is still going to generate cash,” Mathan Somasundaram of Deep Data Analytics in Sydney, said.

China Shenhua Energy (OTC:), the largest miners in China, and Yanzhou Coal (OTC) both fell by 1% and 4.4% in Hong Kong. The broader stockmarket was relatively stable.

Indonesia was the biggest exporter of coal in the world, and the losses were much more severe. Bumi Resources, the world’s largest miner, fell by 4% while Indika Energy dropped 6%. Adaro Energy fell 4%.

Whitehaven Coal, an Australian listed thermal coal miner, saw shares fall 2% while New Hope (OTC) suffered a 0.5% drop in a broader market. Metalurgical coal miners South32 (OTC:), and Coronado Global Resources declined about 2% & 3%, respectively.

This extends a recent pullback which has cut the edge from whopping year-to date gains for Whitehaven South32, New Hope and New Hope that are up more than 40% amid a global oil crunch.

China is the largest producer and consumer of coal in the world. It produced its highest amount of coal for six years last month according to official data. This helped to lower near-term spot price on Monday.

Glasgow has made promises about future reductions in use and has solved rules regarding carbon markets. It also targets fossil fuel subsidies, which can speed up the transition from one energy source to another.

In Asia, Seoul’s listed mine suppliers and owners KEPCO and LX International lost between 1% to 2% on a wider market which was up by 1%.

K2 Asset Management’s head of research George Boubouras in Melbourne stated that spot prices will likely remain elevated over the past, however, stock market gains might be limited by the fuel’s eventual end.

He said that high prices for thermal coal will not translate into increased share prices. Petroleum was slightly less liquid in Asia, while gas and oil were generally steady.

There are some investors who see uranium and other commodities as a way to make up the difference as they look for ways to help fill in the energy industry’s gap.

Canada’s Cameco (NYSE 🙂 reached a decade height last week. Kazakhstan’s Kazatomprom also hit a record.