Category Archives: Coal

Conference Presentation: What is Driving Today’s Investors? by Barry Ritholtz . Commodities Prices are Falling. Really. Barron’s (Google the title, the piece has interesting charts). The 15 year CRB and 20 year CRB . “…by 2030, at which…

Coal Stocks Grinding Higher at Next Big Trade . KOL, however, represents international coal and is a function of China. China’s Economy: The Coming Year at WSJ . Iron ore continues to shine at Mining . Coal’s share of global energy mix to…

The energy piece of the economic puzzle has morphed over the last several years. From a macro economic perspective, energy does not appear to be a headwind. Energy is providing a sustainable economic competitive advantage in the U.S…

Oil Market Going Through ‘Violent’ Structural Change: IEA at CNBC : “…the shift of oil demand from the West to the East is now rapidly accelerating” and “refining margins have become more volatile.” Iraq, Saudi on OPEC collision course…

Oil as an Exhaustible Resource by James Hamilton , which dovetails with the ISA idea worldwide oil production is on an undulating plateau, the shape of which will be determined by price. 9 Charts That Show Why People Have Begun To Whisper…

In NG Calls a reader asked some good questions. My cleaned up response: So you think that natural gas plants will continue to replace old outmoded coal plants? Yes, the coming wave of stateside coal plant retirements is well documented…

Today the investor can waste time watching ‘business news’ being reported from the mall, or you can spend 15 minutes with Independent Stock Analysis: NatGas Inventories Begin Falling Fast, Cold Snap May Send Prices Surging Above $4 Fast at…

Amongst the East Coast hysteria, the NYSE and NASDAQ closed for today and almost certainly will again on Tuesday. My experience suggests speculators will become irritable (no action!) while investors get some work and analysis done without…

Is Coal Ready for Comeback? Coal Investing “…a super-bullish take on the state of coal markets, noting it should pass crude oil as the world’s largest energy source next year as everyone from the U.S. and China to Europe, Japan, and India…

What to make of the latest round of Chinese data at FT Alphaville . “ September Chinese exports came in +9.9% Y/Y, while imports were +2.4% higher. However, the larger than expected increase in exports was due to shipments being made ahead…

Walden Pond: “Do not hire a man who does your work for money, but him who does it for love of it.” Consider your Independent Stock Analysis membership today! Meanwhile, coal bulls and bears alike are a cocky bunch: Coal Today VS. Two Weeks…

The coal stocks ripped higher yesterday. Perhaps speculators were betting a Vice-President candidate was going to announce “I love coal”, as did a candidate at the top of a ticket. Natural gas was very strong on an inventory number…

Don’t look now, but near front month (November) natural gas is trading at $3.29, while December contracts are at $3.58. Coal became depressed on the back of the shale gas boom: Haynesville Play . Coal vs. natural gas: It’s complicated at…

High storage masking ‘fundamentally balanced’ US natural gas market: FBR at Platts : “ The record amount of US natural gas in storage is masking a “fundamentally balanced” gas market this year and one that will be under-supplied in 2013…

Having long advocated w aiting 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…

Today ISA looks extensively at potential timing in the materials space. Material stocks have been some of the biggest movers since China announced minor additional infrastructure investment last week Friday. In fact, the only stocks to…

For the third straight day the coal names have rallied. Interestingly, only those with a position would have noticed. Share owners have had relief and shorts have been squeezed hard. I continue to wait on coal. The rally from deeply…

Today’s stock rally includes strong precious metals with base metals being flat. Jim O’Neal coined the term BRIC and now says “The big commodity play on China is finished.” ( Bloomberg video ). The BRIC nations stock markets are minor…

As the coal stocks grind lower, I really don’t have much to say other than ‘wait’. Coal spot prices, which are uneconomic, are going nowhere fast. EIA “China’s 3.52 billion metric tons of output last year was almost half of the global…

Rail Traffic Nears 4 Year High at Value Plays . First, this is a function of the U.S. private sector economy being decent ( Mark Perry ). “If you are looking for better-than-expected global economic indicators, welcome home; they are…

WLT, ANR, ACI are all one bad day away from fresh lows. BTU and CNX have held up better yet are still weak. The best names, CLD and ARLP, would not be spared in a sector wipe-out. Second quarter conference calls had management commentary’s…

If Moody’s is correct , then natural gas is headed much higher after the shoulder season: Switch From Coal-to-Gas Looks Permanent, Says Moody’s ( CIN ) and Most Coal-to-Gas Switching in U.S. Permanent, Moody’s Says ( Bloomberg ). The price…

Ted O’Brien coal offered some coal market insights in a UBS conference call at Doyle Trading Consultants (Be sure to click play). Mr. O’Brien comments in detail on thermal coal, production cutbacks, exports, natural gas and coking coal…

A fourteen page natural gas storage chartfest from BMO and Investor Village . The hottest July ever helped burn excessive inventory: Haynesville Play . One natural gas tea leaf, from Investor Village : Nat Gas Production Data – Production…

A sustained rise in natural gas is required for the coal sector to rebound. Perversely, Natural gas futures tumble 4% after U.S. supply data this morning ( FP ) is healthy. A strong cyclical US coal upswing needs natural gas production to…

Our interest in coal was born in the depressed state of the industry. These stocks are not for the faint of heart. In this particular trade the speculator is looking for doubles and multi-baggers. As in Five most shocking stocks that have…

The coal stocks ripped higher this morning. I don’t think it’s because natural gas is trading at $2.81 instead of $2.77. The rally is a function of Court strikes down EPA air pollution rule , best explained at Politico . But coal still has…

The super-cycle is still soft as BHP warns of job cuts in coal as China cools in Mining Weekly . However, mine curtailments and capex cuts are the fertile ground of bull markets. Peabody Energy says it is continuing to evaluate spending in…

Coal shares down on lower steel coal price talk at Reuters . ISA readers already know coking coal is not the play right now. “Coal used to make steel is set to drop to the lowest price in two years” at Bloomberg . Walter Energy Shares…

They may be in bankruptcy protection, but Patriot Coal reports hefty Q2 loss on asset retirement charges, slumping revenues at SNL . “Cox added that international coal prices had fallen significantly since the highs of 2011 when they…

This weekend everyone was excited over the coal stocks. The charts finally turned and started to improve: ACI , CLD and a chart-fest at FINVIZ . Got Coal? When “Less Bad” Starts To Work at Upsidetrader garnered a lot of attention. I was…

In spite of the current depressed conditions, coal is here to stay (excellent read by Robert Bryce ). The thesis here at Independent Stock Analysis consists of a booming US thermal market when natural gas production finally declines…

James River (JRCC) reported this morning. The Q2 EBITDA being less than two times interest expense is scary. Throw on capex and they are burning cash. Fortunately, they do have strong liquidity with their next debt maturity not due until…

Alpha Natural (ANR) reported results and had their conference call. Let’s just say they’re in trouble. Much of the industry rationalization in this down cycle is going to come at their expense as the strong eat the weak. I’ll have more to…

The most important catalyst for a return of the coal sector is a normalization of the natural gas oversupply. Aubrey this morning on CHK’s conference call : “Chesapeake’s projected 7% downward trend in gas production for 2013 will likely…

Listening to the coal company management teams on their conference calls broach’s the surreal. The observer is left to figure out by himself the industry is depressed. Hope springs eternal with happy talk. Three things have kept natural…

Coal plant retirements in 2012 look to be 9,000 megawatts against 318,000 megawatts of capacity, a bit less than 3% of the total. More than 1,000 megawatts of the new plant total is coal-fired. John Hanger Meanwhile, “Dale Earnhardt Jr…

Continue to watch natural gas. “US Lower 48 production at 72.39 Bcf/d essentially unchanged in May from 72.38 Bcf/d output in April” ( EIA ). The worm will turn, but have much patience. In the hot 2010 summer about 12% of total U.S…

Today brought coal stock upgrades and a 6% rally in natural gas, yet the coal stocks are weak after Friday’s barn buster rally. While pondering the action, let’s consider more fundamentals: Most important for coal is natural gas. Coal…

Consol Energy and Suncoke Energy are stronger coal players who reported second quarter results today and have higher stock prices. Leveraged and high cost names like ANR, ACI and JRCC are acting poorly in a strong tape. Ironically the US…

The coal stocks continue to trade like grim death. Most of the names are making fresh lows and I do not own any at the moment. Twice in the past I have been deeply involved with stocks trading below one year of cash flow and some of these…

Peabody Energy gave their outlook and reported their second quarter results . Peabody Energy Q2’12 earnings ahead of Street, but 2012 sales view lower at SNL . BTU shares are down 10% on poor guidance from their Australian business for a…

Cooling related power demand remains strong ( Bentek ). So natural gas is higher on a tough market day, dragging the coal sector to near flat. US utilities may return to coal as natgas prices rise at Mining Weekly . Peabody reports second…

The chart is from the Economist . Future electricity generation demand just for air conditioning, and thus for coal, is wildly bullish ( Guardian ). Wind and solar are not going to get the job done. China is always the elephant in the room…

Coal rebounding is dependent upon natural gas pricing. As you already know, I think the the key component is the natural gas rig count. This week the rig count fell by 4 to 518 ( Bloomberg ). Baker Hughes sees a fall to 488 by year end (…

The coal stock bull case has three catalysts: Valuations Will the depressed natural gas environment ever end? Emerging market demand growth This thestreet.com look at ANR, ACI and BTU notes “Investors are anticipating Alpha Natural to…

Old King Coal is Down in a Hole – Is There a Future for US Coal Producers? RBN Energy Coal deliveries by Titan06 . Coal prices bouncing off the bottom: EIA “The U.S. is at risk of relying too much on natural gas as transportation…

About yesterday’s BMO Report which sent the sector reeling: Business Insider . Very interesting, and the opposite of conventional wisdom: Key Facts: Plant Retirements Are A Trickle In 2012 & New Plants Outpace 2 to 1 Retirements : John…

The coal group is getting beat down again today on the BMO downgrade. Their Alpha Natural Resources price target was lowered from $18 to $5 ( Yahoo ). ANR may have intrinsic value of $18 or ANR may have intrinsic value of zero. But not $5…

With a recovery in the coal complex dependent upon some kind of natural gas normalization, note natural gas is in oversupply in two ways: Storage and Supply. First, natural gas in storage is off the charts per the EIA . The low natural gas…

As we at ISA continue to consider the coal industry, questions are popping up faster than answers. The appearance is a rebound in natural gas prices would see coal stocks be the big winners. But will such ever occur? What’s that scale of…

Yesterday WTI crude oil was higher by $1.25 on the potential Statoil strike, yet Canadian pipeline crude differentials rose more than $2 at Platts . This morning Crude Drops as Norway Ends Oil Strike, China Cuts Imports ( Bloomberg ). When…

Outstanding coal analysis re-post by Gregor . First half 2012 coal production was down 6.2% vs 2011: EIA The greenies will try to slow coal exports: Business Week . Fundamental to reviving the depressed coal sector is a natural gas price…

First, a commodity snapshot from Bespoke . Clearly, commodities were the big losers in the first half of this year: Iacono Research . As fallout from the natural gas bust, coal stocks were the worst, being down more than an average of 70%…

The Barron’s Falling Star piece (google the title to read the whole thing) generated excited commentary from mainstream bloggers including Josh Brown and FT Alphaville . We at ISA are goldbugs and regularly note crazy imbalances. Where you…

China Leads World in Global Light Vehicle Assembly Growth at Polk. After all, The world’s shifting centre of gravity is astounding from the Economist . Thus Jeremy Grantham said in Fortune : “We used to live in a world where the price of…

Independent Stock Analysis considers the industrialization of China a major investment theme. Materials and metals, of course, are how we play it: Dramatic copper demand growth expected from China, India, Brazil at Mineweb . Rising China…

Steel-making met coal has remained strong so far, a commodity I lump into the ‘industrialization of China’ investment bucket. But most U.S. producers are electrical generation thermal coal production heavy. Thermal coal on its own competes…

Twice recently we’ve warned against chasing yield. On Tuesday Forbes pumped a high yielding energy name, which promptly cut their dividend in half later that day. Oops. Here is a name to consider: Natural Resource Partners (NRP). NRP…

The central bankers seem to be in charge. Oil Gains a Second Day on Stimulus Speculation, OPEC Output Call at Bloomberg . Oil and price incentives: Econbrowser . A conservative take on the Bakken: NDDMR . Apache goes big on horizontal…

Expect the Bakken boys to report stellar Q2 numbers: “April…was the largest year-over-year increase in the state’s history at 73.5%…) via Mark Perry . Also, The Bakken Buck Starts Here – Bakken Crude Pricing – Part II at RBN Energy . Lower…

Futures are higher this morning, one take: Reformed Broker . Raymond James Energy Stat of the Week pertains to thermal coal: Raymond James . Coal export perspective from the EIA . Oil Gains Most in Five Months on Spain Bailout, China at…

Shale of the Century at the Economist . Price matters, as natural gas displaces coal at the EIA . Capital Destruction in Natural Gas by Testosterone Pit . The IEA put out a natural gas report: Global Natural Gas Demand to Rise Sharply at…

Seems everyday markets are opening strong and close weak. Today we finally opened weak, and while putting this post together green appeared on my screen. Does this make for the turn? The thermal coal stocks have been grim death and PCX is…