King Coal’s Clothes

Having long advocated waiting on coal, note my latest essay:  Coal Stock Bottom Has Passed.  Alpha Natural’s restructuring (Mining Weekly) was the industry catalyst as I stalk entry into my favorite coal play Cloud Peak Energy.

With $4 natural gas now considered a spike (Financial Post), the dynamics have changed.  Should natural gas prices rise modestly, a reverse in fuel switching from natural gas to coal will show the emperor wearing no clothes.  The coal production is not there.  Electrical generation fuel will be short.  Robust inventory will be burned quickly enough.  A modest decline in natural gas supply will begin a strong U.S. thermal coal cycle.

India to take center stage?  “No one is discounting China’s future as a major thermal coal importer, but India will need increasing amounts of electricity if it is to fulfill its infrastructure growth plans, US coal export executives said Thursday.”  Platts.  However, beware of U.S. export opposition via Oregon Live.

China’s Aug coal stocks up 37-69% on year at mines, ports, power plants: CNCA at PlattsCoal’s golden decade fades in China. What next?  “There are disagreements over how quickly coal industry will recover.”  Marketwatch

Internationally, “Cashed-up Japanese, Korean and Chinese buyers are waiting in the wings to snap up bargains, particularly in the coal sector, investment bankers and lawyers said.”  Globe and Mail

Continue to beware struggling U.S. coking coal producers, especially Alpha.  ““The reflation trade may not have long legs” at FT Alphaville.

Coal-Fired Plants Mothballed by Gas Glut at WSJ.

Really, really long term, wind may be a threat to coal:  Smart Brief.

The Independent Stock Analysis coal page has ongoing coverage.  If you are interested in JJ Butler’s continuous aggregation and thoughts, become a member today for $100 a year!