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 2012, 2013, so says the Fly on the Wall.
India to get coal from Kentucky at UPI. Seems like a pretty big deal.
Germany: world’s largest coal-fired power plant inaugurated at AGI. The developed world still needs coal too. In the wake of Japan’s Fukushima disaster nuclear is being pushed aside, but the generation capacity needs to be replaced. Bloomberg
The severity of the natural gas over supply: “By our estimates, low gas prices allowed natural gas generation to pick up nearly 6 Bcf/d of incremental year-over-year (y/y) demand at the expense of coal (through May).” Raymond James on coal switching.
Natural gas continues cutting into coal demand at Fuel Fix.
Institutions have coal on their radar, FWIW: “Fidelity, Wellington, and Blackrock significantly decreased their positions while D.E. Shaw, a well known quantitative hedge fund, and other well known hedge funds increased their holdings of Alpha Natural Resources and other coal companies like Peabody Energy and Arch Coal. This actually makes me a bit nervous because same thing happened with Patriot Coal before it went bankrupt (DE Shaw and these hedge funds might be shorting these coal companies) but I doubt these companies are at risk of bankruptcy any time soon.” Pension Pulse
Coking coal prices are down from a peak last year, but still at high levels. Thus Alpha Natural (ANR) reporting second operating losses is quite disturbing: “Alpha is down because it needs coking coal prices to rebound by 2013 to maintain free cash flow break even.” Peter Epstein wrote that as a Alpha bull. With coking coal pricing tumbling recently, I find the statement particularly damning for Alpha in light of their debt load.
“CLD at resistance at 18 with a break higher looking at 20” chart by Greg Harmon.