"Black gold revival" sweeps across Asia! The blockade of the Hormuz Strait boosts the supply of coal, ushering in a new wave of growth.

CEO Stamatis Tsantanis of the global shipping giant Seanergy Maritime Holdings Corp stated that the demand for coal is becoming increasingly fervent for countries in Asia that have long faced energy shortages, and even for some developed countries like the United States. Coal is becoming a more attractive alternative to oil and natural gas. With US President Donald Trump announcing the use of hundreds of millions of federal taxpayer dollars to build new coal-fired power plants and maintain existing coal infrastructure, as well as constructing a coal export terminal in California to drive the revival of the US coal industry, and amid escalating geopolitical conflicts in the Middle East, disruptions in oil and gas supply, growing energy security concerns in Asia, and the continuous surge in power demand from AI data centers, global demand for coal as a traditional power source seems to be entering a new strong growth cycle. Google, Microsoft, and Meta, the parent company of Facebook, are leading the global construction and expansion of AI data centers, highlighting the importance of power supply. Moreover, if the "self-supply power" path is institutionalized throughout the US and Europe, a significant portion of AI capital expenditure is likely to be shifted to data center power chain equipment and grid technology stack, thereby driving a significant surge in coal demand to enter the power system quickly. In a recent research report, Wall Street giant Goldman Sachs revised its massive electricity demand forecast driven by global data centers up to 2030, increasing it by 220% compared to the year 2023 (Goldman Sachs' previous forecast was +175%), which is equivalent to adding a major electricity load of a "top ten electricity-consuming country" to the global market. Tsantanis said in a media interview on Wednesday, "China, South Korea, and Japan have been stocking up on coal in large quantities in recent months." "More importantly, coal is also becoming a strategically important commodity led by the US government." Renewed Conflict in the Strait of Hormuz The Strait of Hormuz has effectively been in a strict state of closure since early March, prompting Asian buyers to actively seek alternative sources of energy to replace disrupted oil and natural gas supplies from the Persian Gulf. The US has become the "last supplier" for some energy buyers. Analysts suggest that countries with energy demands in Asia, such as China, have significantly reduced their oil imports and are turning to raw materials like coal instead of oil to produce chemicals. As the US military begins new strikes on multiple targets in Iran and Iran announces the closure of the Strait of Hormuz to all ships, including oil tankers and commercial vessels, with threats of attacks on any vessels attempting to pass through the strait, WTI crude oil futures prices rose over 4% in Wednesday's US stock market trading, reclaiming the significant $90 mark, while Brent crude oil futures prices for August closed up nearly 2% toward $95. The Trump administration is running out of patience for both sides to reach an agreement, and the latest escalation of military conflict could prolong this Iranian war that has disturbed global financial markets and sparked inflation concerns. As oil prices remain high and geopolitical tensions worsen, pricing data from the interest rate swap market shows that traders are still fully pricing in the Fed's return to interest rate hikes in December, in line with the hawkish bets from bond market traders. The CME FedWatch Tool also shows that traders are unanimously betting on the Fed's return to rate hikes in December, with some traders also betting on the start of rate hikes in October by the Fed. Tsantanis warned in the interview that if the strong El Nio phenomenon further increases global fuel demand and prices, some regions in Asia will face a significant energy demand. Seanergy, a Cape Town-based ship operator, currently does not have any vessels transporting oil or passing through the doubly-blocked Strait of Hormuz; this waterway is not directly located on the main routes favored by large bulk carriers transporting commodities such as iron ore, coal, and alumina. However, Tsantanis noted that the higher prices of marine fuels and the extended routes taken to avoid "problem areas" including the Red Sea have significantly increased freight costs. He added that the impact of rising transportation costs goes far beyond the energy markets. They could continue to push up the comprehensive costs of transporting industrial metals such as aluminum and copper, essential for global infrastructure valued at trillions of dollars and for global AI data center construction projects. Fuel and natural gas shortages have raised the strategic value of "black gold," with coal demand entering a new growth curve Speaking in the Oval Office last week, Trump announced his "beautiful coal" plan, stating, "Today, we are taking historic action to lower energy prices and living costs for all Americans using clean, beautiful coal. Look at those successful countries, they all use coal." About $500 million of this plan comes from the Defense Production Act from the Cold War era. This is the latest move by the Trump administration to support coal mining and coal-fired power generation, ignoring opposition from environmental activists. Environmentalists argue that coal will exacerbate global warming and worsen air quality. This move is part of a broader agenda for Trump's second term, aiming to promote the expansion of oil, natural gas, and coal production in the US. Previously, the Trump administration had forced some coal-fired power plants to continue operations after planned closures, expanded coal mining rights on federal land, and procured coal-fired power for the Pentagon. As the US embraces coal again and with the surge in coal demand from energy-demanding countries in Asia, it highlights a new wave of demand growth for coal led by the Asian market in the midst of Middle East conflicts, disruptions in oil and gas supply, energy security concerns in Asia, and rising demand for power from data centers. When oil prices and liquefied natural gas prices become unstable due to shipping bottlenecks, war risks, and rising transportation insurance costs, the global power system often instinctively returns to coal, which is "reservable, schedulable, and has mature infrastructure." For example, during the Russia-Ukraine conflict in 2022, there was a surge in demand for coal in Europe, mainly because Europe had to seek coal resources for power generation after losing cheap natural gas supply from Russia. Utilities in Asia are increasing coal-fired power generation to reduce costs and ensure energy supply; in contrast, spot prices of liquefied natural gas in Asia have doubled amid supply shocks to a three-year high, while the benchmark coal price has risen by about 14%, making it more economical. From the perspective of commodities and shipping, the "black gold attribute" of coal is being revalued: it is no longer just a high-carbon old energy source, but plays multiple roles in an energy crisis as a backup power source, industrial raw material, chemical substitute, and geopolitical security inventory. The CEO of the shipping giant Seanergy Maritime mentioned the recent large-scale stocking of coal by energy-demanding countries in Asia, China's inclusion, and the US viewing coal as a strategic commodity. Behind this is the same logic: when the transportation of oil, gas, and liquefied natural gas is disrupted by bottlenecks like the Strait of Hormuz and the Red Sea, coal, although affected by marine fuel and detour costs, has a more dispersed supply chain distribution, more direct inventory management, and can quickly enter the power and chemical systems. There is no doubt that coal is experiencing a new demand curve of "Asian energy security premium, oil and gas substitution demand, and data center-driven power load growth." In the short to medium term, coal will likely undergo a significant reassessment of market value in the commodity market due to Middle East energy shocks, Asian heat waves, potential super El Nio heatwaves, power security, and rising costs of global data center construction; however, whether it can form a truly super demand cycle in the long term will depend on the evolution of geopolitical situations, progress in the El Nio heatwaves, the growth rate of Asian power demand, the capacity for renewable energy integration, natural gas prices, and policy constraints.