Seeking Alpha

Coal stocks are strong following reports China’s new leadership pledged to promote...

Coal stocks are strong following reports China’s new leadership pledged to promote domestic demand and urbanization with wider policy support for economic recovery. China relies heavily on coal for power generation. ANR +10.6%, ACI +7.7%, WLT +6.7%, CNX +5%, BTU +4.7%. KOL +2.9%.
Comments (10)
  • Curious behavior. Other news sources report that China's new leadership has stated they will only continue past policies. It is surprising that all these coal companies would benefit so much from even a clearly stated support for the coal industry, which did not occur. Perhaps there are other justifications?
    5 Dec 2012, 03:31 PM Reply Like
  • Gas prices are up today as well if I'm not mistaken... also, the world could be realizing that while the US enjoy's $3.50-$4 nat gas, the rest of the world is paying anywhere from $8-$15 (Numbers could be off haven't seen a global price comparison in a month or two). Not to long ago there was an article stating that Germany (a country who is/was pushing green tech very hard) was shutting down Nat Gas plants in favor of Coal due to Nat Gas high prices.

     

    Note though that coal has been up and down a lot in the last few months, mostly due to the US elections but now that the shenanigans is over we can probably point at Nat Gas pricing and China leadership cues.
    5 Dec 2012, 03:36 PM Reply Like
  • Caladesikid2:

     

    If you are wondering about China and coal, you need to read my article here:
    http://seekingalpha.co...

     

    Most American thought the USA is the center of the world. To the Chinese they consider themselves the center of the world, for very good reasons. The name of their country in Chinese literally means "The central country". Just remember, China has FIVE time the population of the USA. Each of the nearly 1.4 billion Chinese want to live a better life and they are willing to work hard for it.

     

    China consumes nearly 4 billion tons of coal and generates 4.7 trillion KWH of electricity per year, which is more than 4 times higher coal demand and more than 20% times electricity demand than the USA. Should China consume FOUR times petroleum than the USA does, then the world will have to sell ALL the oil to China and leave not a drop of oil to the USA or any other country. What it says is the only thing that can meet China's rapidly growing energy demand, is COAL, not oil.

     

    To think that China still consume only slightly more than the USA in terms of electricity, with 5 times the population, you can see that there is still huge growth ahead in China's coal demands.
    5 Dec 2012, 04:01 PM Reply Like
  • Whatever happened to Obama and his big infrastructure re-building, including the power grid? Were there not funds appropriated for these projects, years ago?
    They would require alot of high quality met coal.
    5 Dec 2012, 03:52 PM Reply Like
  • Did you see that bridge collapse in NJ under the train? That's what happened to the infrastructure funds lol
    5 Dec 2012, 03:53 PM Reply Like
  • Look at the one-year chart of ANR. If that isn't bullish I don't know what is - higher lows and higher highs.
    5 Dec 2012, 04:09 PM Reply Like
  • One year ago it was in the 20's. although I agree it has bottomed and probably won't go below $6 anytime soon.
    5 Dec 2012, 04:19 PM Reply Like
  • I'm curious, at what point will you start buying? With it now making higher lows, the days of sub-7 may be gone. China is picking up, and people are going to want performance next year. Where better to look? These names have been decimated, and I would think the smart money (hedge funds) will begin buying now, not when these names start shooting up. Nat gas is on an uptrend as well. It seems to me like all the negatives of 2012 are turning.
    5 Dec 2012, 04:41 PM Reply Like
  • I'm already in coal somewhat unfortunately...

     

    ANR and JRCC, down on both quite a bit as I bought way to early but I re-bought ANR around 6.50 and greatly reduced (almost in half) my over all cost per share.

     

    I'm pretty confident ANR will be a winner for me this time next year... JRCC I think I'll be lucky if they don't go bust, but if they live through this downturn I think I'll make a few bucks there too but JRCC for sure is the riskiest play and not necessarily the best (hindsight is 20/20 of course, and lets just say I took some bad advice).
    5 Dec 2012, 04:51 PM Reply Like
  • If you look at coal consumption its from a transition from nat gas because of the higher prices utilities had to pay. $3.5-4 natgas put in a bottom in coal prices. Stocks likie ACI ANR WLT are up hjolding strong because of natgas switching. Only what will prop up these stocks is China consumption because this is a globla market and not many companies can secure supplies over the long-term
    5 Dec 2012, 06:57 PM Reply Like
DJIA (DIA) S&P 500 (SPY)