Coal shares rally as traders assess Russia’s decision on the Nord Stream 1 pipeline

The price of coal shares rallied on Thursday on reports that Russia will reduce gas flow through the Nord Stream 1 pipeline to Europe when its maintenance period ends.

As of 12.12 hrs. local time in Thailand, the share price of Banpu Pcl. (SET: BANPU) rose THB0.30/share or 2.34% to THB13.10/share, with a trading value of THB1,151 million. 

The share price of Asia Green Energy Pcl. (SET: AGE) rose THB0.08/share or 2.11% to THB3.88/share, with a trading value of THB123 million.

The share price of The Lanna Resources Pcl. (SET: LANNA) rose THB1.10/share or 5.29% to THB21.90/share, with a trading value of THB165 million.

The share price of Thai Capital Corporation Pcl. (SET: TCC) rose THB0.08/share or 10.13% to THB0.87/share, with a trading value of THB19 million.


According to Reuters on Wednesday, citing two Russian sources familiar with the export plans, Russian gas flows through the Nord Stream 1 pipeline are expected to resume on time on Thursday following the completion of scheduled maintenance, although at a lower capacity.


Mr. Suwat Sinsadok, Managing Director of FSS International Investment Advisory (FSSIA) said that despite Russia is likely to restart gas exports from Nord Stream 1 on schedule, Europe should still suffer an energy crisis, resulting in a spike in energy prices. There are two possible outcomes: if Russia continues to shut down the gas pipeline, energy costs for oil, gas, and coal are projected to rise again, with coal prices reaching as high as $500 per ton, up from approximately $400 per ton.

If Russia decides to restart the gas exports, possible not at full capacity, Europe will have a supply of gas, but not enough for winter consumption. Consequently, the demand for coal will rise to replace the utilization of gas, driving coal prices to increase again.

It is likely to benefit shares in the coal sector, particularly BANPU, the sector’s top pick. FSSIA has given a target price for BANPU at THB15.00/share. LANNA and AGE are expected to benefit as well.