Bumech sees a recovery in the coal market and is satisfied with sales in the third quarter of this year, but the full-year sales target (and production target) will not be achieved, the management board informed.
“Yes, after the spring’s negative turnaround in terms of a drastic drop in demand for energy fines, we are observing a significant increase. Coal producers are also helped by the weakening of the zloty, following the Monetary Policy Council’s decision. The decline in the competitiveness of coal imports goes hand in hand with the increase in the competitiveness of domestic producers. High demand for coarse and fine coal will continue until spring, as the decline in domestic production cannot be supplemented by cheap imports. Additionally, due to the blockade of Ukrainian ports and the complete cessation of mining in local mines, we forecast that our neighbor, despite internal difficulties, will purchase supplies from Poland. The limit of the size of these purchases is the capacity of the Polish transhipment infrastructure,” wrote the management board in a chat organized by the Association of Individual Investors, when asked how it assessed the recovery on the coal market, whether it was satisfied with sales in Q3 and whether it was optimistic about Q4.
“Unfortunately, due to the spring failure and a combination of unfavorable factors, production and sales goals will not be achieved. Therefore, in the spring we came up with the concept of coarse coal and negotiated export sales since the spring blockade of the port in Odessa, the effects of which are now being presented. The volume will be lower, but we are making up for it with the high price of coarse grades and the high dollar exchange rate,” the management board also wrote when asked whether last year’s coal production volume would be repeated this year.
The Management Board also announced that due to the significant improvement in the economic situation, it had resumed importing coal from South Africa.
“The mentioned contract [with the South African contractor] generated revenue of PLN 44 million. The drop in demand forced us to temporarily limit the import of raw materials this spring. The improving economic situation means that these activities will be continued, there is another ship with raw material from South Africa on its way to Poland,” we read in the chat.
The basic areas of activity of the Bumech Group are hard coal mining in the Silesia Mine and the provision of underground drilling services, as well as production, service and renovation services of mining equipment and machines. The company has been listed on the Warsaw Stock Exchange since 2009. Its consolidated sales revenues reached PLN 1,112 million in 2022.