The world keeps talking about moving away from coal, but expensive gas is sending countries straight back to it. European gas prices climbed above €100 a megawatt hour last week, making coal a cheaper option for electricity generation, and power stations that can switch fuels are doing exactly that. The International Energy Agency expects the world to burn a record 8.94 billion tonnes of coal this year, with South African export prices climbing above $132 a tonne.
But can we actually get the coal out? Richards Bay Coal Terminal shipped 57.66 million tonnes last year, up from a record low of 47.2 million in 2023, when Transnet’s coal line was struggling. Transnet has approved R6.77 billion to restore that line, and says rail volumes still need to climb to 65 million tonnes.
Oil, still waiting on Iran
It’s a recurring theme, but oil remains the big uncertainty hanging over the global economy. Brent crude closed at about $113 a barrel on Friday, compared with roughly $72 before the war began at the end of February. October was the worst month on record for attacks on shipping in and around the Strait of Hormuz, and on Saturday Iran’s navy said another tanker had hit a mine there and caught fire. Even so, oil exports from the Gulf have recovered to close to where they were before the war.
US Vice President JD Vance has reached out to Iran to restart peace talks, but Tehran is refusing to move until its conditions are met. Parliament speaker Mohammad Ghalibaf says progress can only come once Iran’s seven conditions are agreed. Over the weekend, Secretary of State Marco Rubio said President Trump had not decided on new strikes. At All Weather Capital, Nick van Rensburg’s biggest concern is any damage to energy infrastructure, which could send oil prices even higher, making everything from transport to food more expensive.
Gold slips, copper waits
Meanwhile, precious metals have been taking a beating. Gold slipped below $4,000 an ounce on Friday, closing at its lowest level in 12 months, while platinum has fallen roughly 17% over the past month. Although gold is traditionally seen as a safe haven during uncertain times, van Rensburg believes further escalation could hurt its price. Markets have also linked gold’s slide to growing bets that US interest rates will rise, which makes gold less attractive than investments that pay interest.
Copper, however, could benefit if the war ends, as economic confidence and demand recover. It has already had a strong year, gaining about 18% on the London Metal Exchange and setting a record of $14,875 a tonne in September.
Views quoted from All Weather Capital are their own and not financial advice. All Weather Capital is an Authorised Financial Services Provider (FSP 36722). Full disclosures are available at allweathercapital.co.za.
