- Coal imports to the U.S. surged 44% Y/Y to 5.4M metric tons during the first six months of 2014, even as coal mines close throughout central Appalachia.
- The main reason is price: It costs $26/ton to ship coal from central Appalachia to power plants in Florida vs. $15/ton to get coal from a mine in Colombia.
- Appalachian miners such as Alpha Natural Resources (NYSE:ANR) say imports from Colombia have added to their troubles; Colombia produces a high quality thermal coal, it's inexpensive to mine it, and relatively inexpensive to ship it to the U.S. east coast.
- The cheaper imports benefit some utilities such as Southern Co. (NYSE:SO), which has 63 coal-fired power generating units in four states and bought 25% more imported coal than expected.
- Low prices for international shipping also have helped Colombian coal, as the Baltic Dry Index has fallen to one-tenth of its level five years ago; U.S. rail rates have mostly held firm over the same period.
- ETFs: KOL
at Zacks.com (Dec 31, 2014)