At the very least I feel comforted in knowing I am looking in the right place and the rights catalysts for coal stocks, now just need the catalyst to come to fruition......
--------------------------------------------------------------------------------------------------
NEW YORK - Shares of some coal mining companies rose Friday after an analyst predicted the battered industry may see improvement next year, if prices become more competitive and demand strengthens.
--------------------------------------------------------------------------------------------------
NEW YORK - Shares of some coal mining companies rose Friday after an analyst predicted the battered industry may see improvement next year, if prices become more competitive and demand strengthens.
Coal
is becoming more competitive since natural gas prices have risen closer
to $4 per 1,000 cubic feet. It was below $2 earlier this year. And coal
demand is expected to pick up as emerging-market economies get
healthier, Sterne Agee analyst Michael S. Dudas said.
The
coal industry has suffered since a boom in production and growing
supplies caused the futures price of natural gas to hit a 10-year low of
$1.91 per 1,000 cubic feet in April. Many utilities and other companies
switched to natural gas from thermal coal for fuel.
In
addition, a mild winter cut demand for electricity and heating, while
the slower global economy eroded demand for steel. That hurt sales of
metallurgical coal used in steelmaking.
Many
coal companies in the U.S. and around the world have cut back
production and shuttered mines to reduce costs. Several have taken steps
to enhance their financial flexibility, Dudas said.
Higher
natural gas prices have brought some business back to coal producers
recently. For example Southern Coal Corp. said earlier this month that a
new multiyear contract to supply coal to American Electric Power will
allow it to restart some idled mines.
-----------------------------------------------------------------------------------------------------
I will have to admit I am concerned about the near-term weather forecast for higher temperatures in the East and the recent builds of natural gas in storage.
No comments:
Post a Comment