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A Turning Point For US Coal And Dry Bulk Shipping Stocks?

|Includes:ARCH, BTUUQ, DryShips Inc. (DRYS), EGLE, EXM, NM, PCXCQ, SB

Due to the glut of natural gas and environmentalist pressure, the domestic demand for coal has been depressed. US coal producers are looking abroad.

From Marketwatch

"The U.S. Energy Information Administration estimates 2011 exports surpassed 100 million short tons for the first time since 1992, and some market watchers expect exports to top that this year. ....................................

Higher sales prices in Asia and Europe have made sending coal to those markets more attractive, while U.S. emissions regulations and competition from cheap natural gas limit domestic demand.

Fast-growing China and India have been sucking up shipments to fuel an expansion of coal-fired power plants, disrupting traditional supply channels. South Africa -- a traditional exporter to Europe -- has been sending more shipments to Asia, creating a hole in the market that the U.S. has helped fill. "

The US coal exports could eventually hit a ceiling, as transportation costs will make U.S.-produced coal less competitively priced than coal produced closer to major Asian customers. However, shipping rates that are hovering around historic lows can help US coal exports. Meanwhile, dry bulk shipping that has been abysmal amidst a gigantic glut of ships may get a lift from increased coal transportation across the ocean.

Watch lists:
Coal- ACI, ANR, BTU, CNX, PCX
Dry Bulk Shipping- DRYS, DSX, EGLE, EXM, SB, NM

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in DRYS, ANR, PCX, DSX over the next 72 hours.

Stocks: DRYS, DSXZQ, ARCH, BTUUQ, PCXCQ, EGLE, NM, EXM, SB