New Hope Corporation's Coal Windfall Rises and Falls With Middle East Tensions

A Strait of Hormuz-driven thermal coal spike delivered a 67% annual gain, before easing tensions brought prices, and the stock, back down.

30 Sep 2026 · 4 min read

New Hope Corporation was one of the ASX's best performers through the March quarter, up nearly 70 percent for the year, as the Iran conflict closed the Strait of Hormuz and drove thermal coal prices sharply higher, before easing US-Iran tensions pulled prices back down through June, leaving fund managers debating whether the low-cycle valuation case still holds.

A rare beneficiary of the Middle East energy shock

Investors Mutual Limited said New Hope was the best performer in its portfolio for the quarter, up 48 percent, as war in Iran combined with Indonesian export controls to push seaborne thermal coal prices higher, though the fund trimmed its position into the strength to redeploy capital elsewhere while remaining constructive on the long-term thermal coal outlook. Spheria Asset Management said its overweight position, up 27 percent, was one of its largest contributors. Ellerston Capital detailed the scale of the disruption, with the Iran war blocking the Strait of Hormuz and restricting around 8 million barrels a day of oil flow, roughly 7.5 percent of global production, a supply shock that sent oil prices up around 50 percent and doubled gas prices. BKI Investment Company said its energy exposure through New Hope rose 27.3 percent for the month and 67.1 percent for the year to March 31, describing it as a deliberate, disciplined holding grounded in valuation, balance sheet strength and cash generation. Sage Capital said its short position moved sharply against it as the conflict drove a severe energy commodity spike across the board.

For the year to 31 March 2026, New Hope was up 67.1%. BKI's exposure to high-quality thermal coal producer New Hope Group has been a deliberate and disciplined holding, grounded in valuation, balance sheet and cash generation.

— BKI Investment Company, Quarterly Report, March 2026

A low-cycle, cheap-valuation thesis

Seneca Financial Solutions favoured New Hope alongside Stanmore as a coal opportunity where pessimism may have gone too far, combining low-cycle pricing with cheap equity valuations, an established producer profile and a strong management team. Contact Asset Management said its exposure to New Hope is grounded in valuation, balance sheet strength and cash generation, remaining cognisant of the longer-term energy transition while noting such transitions rarely proceed in a straight line.

It's a simple thesis, this one for us. It's low cycle pricing combined with cheap equity valuations. New Hope is thermal out of New South Wales and Queensland. Really well-managed coal miner.

— Seneca Financial Solutions, Presentation, May 2026

Export exposure and capital discipline

Seneca Financial Solutions noted New Hope had just pressed go on another buyback alongside plenty of dividends. Datt Capital said New Hope was its largest contributor as it benefited from higher thermal coal prices and anticipated strengthening forward demand due to ongoing LNG supply disruption out of Qatar. Longwave Capital said all of New Hope's assets are located domestically, but its earnings exposure is almost entirely tied to export coal markets rather than domestic demand, with around 90 percent of coal revenue generated from offshore or globally price-linked customers led by Japan, China and Taiwan.

Easing tensions bring the price back down

Perpetual Asset Management said the stock became a modest detractor, down 9.0 percent for the quarter, as progress in US-Iran negotiations pushed energy prices lower across the board, with Newcastle thermal coal falling from around $152 a tonne to $130, dragging down both New Hope and the broader ASX energy sector.

The stock was sold down over June as progress in US-Iran negotiations pushed energy prices lower across the board, causing Newcastle thermal coal to fall from approximately $152/t to $130/t.

— Perpetual Asset Management, Monthly Report, June 2026

The long-term case: low-cost assets, disciplined capital allocation

Datt Capital said New Hope's assets are high quality in being fairly low on the cost curve, allowing the company to make money throughout the commodity cycle, and that capital allocation is one of the key differentiators for a commodity company, with New Hope having proven over time it does the right thing by shareholders, leaving the fund favourably inclined toward energy commodities generally.

What fund managers say they are watching next is whether thermal coal prices stabilise after retreating from the Iran-conflict peak, continued capital returns through buybacks and dividends, delivery on New Hope's low-cost position through the cycle, and whether export demand from Japan, China and Taiwan stays supportive amid a broader energy transition that Contact Asset Management notes rarely proceeds in a straight line.