Week in Review: From Market Volatility to Regional Conflict
- JPT Team
- 1 day ago
- 3 min read
The situation in the Gulf has moved beyond a "gas spike." We are now witnessing a systemic blockade of the world’s most critical energy artery, with Kuwait and the Strait of Hormuz at the absolute center of the storm. We are starting to wonder if the conflict should be called the Third Gulf War.
The "Fossil Detour": Why Coal is Coming Back
While the UK government remains officially committed to its "don’t panic" message, the rest of the world is frantically flipping the switch back to the "dirtiest" fuel to survive the 135p gas reality.
Germany’s U-Turn: This week, Chancellor Friedrich Merz’s government officially moved to consider reactivating 8.8 GW of standby coal reserves (hard coal and lignite). Germany realises that with the Middle East in flames, renewables alone cannot maintain the industrial baseload.
The Asian "Coal Vacuum": In Southeast Asia, the ripples are even more severe. With Qatari LNG effectively trapped behind the Hormuz blockade, Japan, Thailand and South Korea have pivoted back to coal-fired generation to keep their electronics and automotive factories running.
The UK’s Vulnerability: Unlike Germany, the UK has already dismantled its coal infrastructure. Ratcliffe-on-Soar, our last coal plant, is currently being decommissioned. This leaves the UK uniquely exposed—we don't have a "Coal Safety Net." We are at the mercy of the 135.15p gas price.
The "Tanker Trap" and the Kuwaiti Collapse
The reason for this global pivot back to coal is the total paralysis of the Strait of Hormuz.
Kuwait: Kuwait Petroleum Corporation (KPC) has declared Force Majeure. Unlike Saudi Arabia, which has pipelines to the Red Sea, Kuwait is entirely dependent on the Strait.
The Aqua 1 Ripple: The missile strike on the Aqua 1 LNG tanker has sent insurance premiums to 10% of hull value. Shipping lines are now refusing to enter the Gulf. This "Tanker Trap" means the LNG that Europe and Asia were counting on for May is physically not coming.
The Desalination Crisis: In a brutal escalation, strikes on Kuwaiti power & desalination plants (which provide 99% of their water) take the war into unchartered territories.
Why Coal Doesn't Save the Paper Mill
There is a common misconception that "coal coming back" will lower energy costs for manufacturing. For the cardboard tube industry, this is a myth:
Gas-Locked CHP: Most modern UK and European paper mills run on Gas-Fired Combined Heat & Power (CHP) plants. They cannot simply "shovel coal" into a turbine designed for natural gas.
The "187-Therm" Math: Even if the national grid gets "grayer" with coal power, the drying hoods at the mill—which consume those 187 therms per tonne—are gas-dependent.
The Result: The 135p gas price remains a direct hit to the coreboard cost base. The £112/tonne "Burnt Cost" we identified earlier is still the industry's new floor.
The JPT "Certainty" Report: April 2026
In this "Fossil Detour" era, JPT is the only supplier operating with a "Stock-First" strategy.
In March JPT deployed $700,000 in immediate capital to secure raw paper stock.
Was this stock secured at an increased price? Absolutely. We aren’t going to sugarcoat the reality of a 135p gas market and $108 oil. However, in the current climate, certainty is the name of the game.
While other suppliers are hiding from the bad news or waiting for multi-national board meetings to approve a response, we are tracking deliveries as they arrive at our warehouse. We have paid the market premium today to ensure that you aren't the one paying the price for a halted production line tomorrow.
Final Supply Status:
Price Adjustment: Effective May 1st, 2026, JPT will implement a 10% price adjustment across our cardboard tube and core range.
Existing Partners: We are 100% certain of fulfilling all existing agreements. You are shielded from the "Empty Pipe" phase due to hit Europe in late April and into May.
Market Excess: We have the capacity to pick up excess tonnage. If your current supplier lets you down, JPT is your supply lifeline.
