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Goldman Sachs cuts 2013-14 met coal prices, predicting a slower, longer grind back to mid-cycle....

Goldman Sachs cuts 2013-14 met coal prices, predicting a slower, longer grind back to mid-cycle. The firm says reductions to its forecasts for China, Europe and Japan seaborne imports mean less Australia and U.S. exports should be needed. Goldman remains neutral on U.S. coal stocks, but cuts price targets for ANR, ACI, CNX, BTU, SXC and WLT.
Comments (10)
  • chuck lewis
    , contributor
    Comments (353) | Send Message
     
    what price targets?
    10 Dec 2012, 09:32 AM Reply Like
  • krivah
    , contributor
    Comments (13) | Send Message
     
    Sounds like some kind of weather forecast, which might be true and on the other hand not. I am gonna stay on the ´not´ side still.
    10 Dec 2012, 09:32 AM Reply Like
  • HoldAndBuyInvestor
    , contributor
    Comments (146) | Send Message
     
    I am speechless with Goldman. 3rd QT, 2011, Goldman rated ANR as conviction buy. It was then around $45. How can we rely on competence of Goldman. They are short on coal and want to leverage political atmosphere which is anti-coal.
    10 Dec 2012, 10:06 AM Reply Like
  • Mark Anthony
    , contributor
    Comments (3601) | Send Message
     
    "Two more years of below midcycle"? That's nonsense.

     

    The coal sector has much shorter turn around cycles comparing with other commodity cycles, because relative to the annual supply and demand volume, the inventory space is very narrow. Power plants stockpile roughly 1 to 20 months worth of coal supply. That's only roughly 10% to 15% of annual supply/demand. As the demand was weakened temporarily dur to the warm winter early in 2012, US coal producers also promptly cut production to rebalance the supply and demand. Coal price is already up $12 from the low at the end of August.

     

    Look at the history, in mid. August, 2007, the US coal sector was also at a low. They also said there would be several more years of depressed coal price. Well in just ten months, coal price went from $30+/ton to $140+/ton, and coal stock JRCC went from $3.56 to $62.86. Those folks who said there will be several more years of coal bear market completely missed the point how fast the coal sector can turn around.

     

    Same happened in the natural gas price. In early April we had an un-precedent level of NG storage glut of 1000+ BCF. Just 8 month later, that glut is completely gone. Didn't these folks say NG should remain depressed for several years, too? They were wrong.
    10 Dec 2012, 11:49 AM Reply Like
  • Oz_Rob
    , contributor
    Comments (520) | Send Message
     
    Wow thats a whole lot of misinformation there Mark, where to start. First, as has been repeatedly pointed out to you, the weakened demand was not a temporary winter effect, you theorised it would be and the theory was proven wrong, coal demand was down 15% in may, 17% in june, 10% in july, 11% in August and 11% in september. None of those can be attributed to a warm winter.
    Im not sure where your getting your coal price information or if your just looking at long term future prices but the near term contracts have not risen $12, they bottomed in september at $58 and are currently slowly falling from a high of $63 at the end of novembero and are currently at $61.95 http://bit.ly/Ivz1DK
    Yes it is true there was a hyper-inflationary bubble in coal price in 2008, the market was rather different in 2008 though if we are going to be honest. The macro-economic differences between today and early 2008 are nearly polar opposites. There is absolutely no convincing evidence that a repeat of 2008s sharp and completely unsustainable coal run up will or could be repeated.
    10 Dec 2012, 03:46 PM Reply Like
  • leppak
    , contributor
    Comment (1) | Send Message
     
    Goldman never can be trusted, they fuck the whole world economy if they come out better of it.
    10 Dec 2012, 11:55 AM Reply Like
  • PM's Rock
    , contributor
    Comments (102) | Send Message
     
    That is so true. The bigger problem though is they can get away with it because they own the political landscape. Someone please explain how I am wrong. Yep... I thought so. We are being screwed because as a mass, we are stupid. I wish the folks with the guns would hook up with the folks who understand economics!!!!
    10 Dec 2012, 02:44 PM Reply Like
  • nickbukowski
    , contributor
    Comments (28) | Send Message
     
    I love it. Goldman downgrades BTU and it's up 2% today.
    10 Dec 2012, 02:10 PM Reply Like
  • sat_mcsd1
    , contributor
    Comments (34) | Send Message
     
    ANR is up 8.5%
    10 Dec 2012, 02:12 PM Reply Like
  • rocknrollstew
    , contributor
    Comments (102) | Send Message
     
    LETS hope the emerging markets /brics start ramping up next year, and beyond..the coal plants in the usa are dwindleing way, thank obama......its going to be all about exports for coal in the future..asia especially
    10 Dec 2012, 09:10 PM Reply Like
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