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Fri, Nov. 21, 10:28 AM
- The EPA will abandon its proposed rule setting renewable fuel targets for 2014, with an announcement to come today, according to a Bloomberg report.
- Ethanol stocks: PEIX, GPRE, GEVO, MEOH, SZYM, REX, CDTI, REGI, FF, AMRS, ANDE, FUE
- Related refining stocks: VLO, HFC, MPC, TSO, WNR, ALJ, PSX, PBF, DK, NTI, ALDW
- Related coal stocks: BTU, WLT, CNX, ACI, ANR, YZC, ARLP, AHGP, NRP, PVR, PVG, PVA, OXF, CLD, WLB, SCOK, KOL
- Related solar stocks: JASO, SPWR, TSL, FSLR, CSIQ, YGE, EMKR, SOL, JKS, CSUN, SCTY, RGSE, SUNE, HSOL, DQ, OTCPK:DSTI, ASTI, OTCQB:SPIR, OTCQB:SOPW
- ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, FENY, PXJ, RYE, FXN, DDG, FUE, KOL, TAN
Fri, Nov. 14, 2:39 PM
- Thermal coal and coal stocks are rallying after Glencore (OTCPK:GLCNF, OTCPK:GLNCY) said it would halt production at its Australian mines for three weeks to try to tackle a global supply glut.
- Deutsche Bank says the move is an important signal from the world’s largest producer of seaborne thermal coal: “Taking 5M tonnes out of the 1.1B [a year] seaborne market is a relatively small starting point, but may mark the start of more to come."
- But other analysts say it is no sure thing that Glencore’s move would be copied by others or lead to permanent mine closures; unlike some rivals, Glencore has less exposure to "take or pay” contacts which oblige miners to pay charges of up to $25/metric ton to use rail and port.
- ACI +10.7%, ANR +10.1%, WLT +5.2%, BTU +4.3%, CLF +3.2%, CLD +2%, CNX +1.9%.
- ETF: KOL
Thu, Nov. 13, 4:58 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says it will shut down its Australian coal mines for three weeks, resulting in a 5M metric ton reduction in thermal coal production.
- “This is a considered management decision given the current oversupply situation and reduces the need to push incremental sales into an already weak pricing environment,” the company says.
- The world’s largest exporter of thermal coal owns 13 coal mines across Australia, which produced more than 80M metric tons of thermal and coking coal last year.
- ETF: KOL
Thu, Nov. 6, 3:35 PM
- “The fundamental case for coal is strengthening but requires several years of patience," and coal miners (NYSEARCA:KOL) still pose too much short-term risk for investors, J.P. Morgan analyst John Bridges says.
- The coal sector is "very much a weather trade" which is sensitive to this winter’s temperatures, Bridges says, "consequently, without another particularly cold winter or a direct cyclonic hit on Australia’s coking coal mines, coal prices and thus the coal equities are likely to remain volatile through the 2014-15 winter."
- In the sector, Bridges recommends Consol Energy (CNX +0.6%), Alliance Resource Partners (ARLP -0.4%) and Foresight Energy (FELP +1.7%), as only high-yielding coal MLPs are resonating with investors.
- Most big coal names are adding to yesterday's gains, as the IEA predicts world coal demand to grow 2.3% in 2015, mostly undaunted by stricter clean air regulations and competition from cheap natural gas: ANR +5.1%, ACI +4.7%, BTU +0.5%, WLT -1.1%, CLD +0.9%.
Wed, Nov. 5, 12:24 PM
- Coal stocks (NYSEARCA:KOL) are rallying in the hope that the new balance of power in D.C. can at least halt what the companies view as an attack on their livelihood.
- Strategas' Daniel Clifton thinks there’s a good chance the new Congress will “slow down EPA rules on coal” which have limited its use by utilities, and any approval for the Keystone XL pipeline would mean more rail transport for coal, a problem Peabody Energy (BTU +4.4%) has said was limiting its coal sales.
- ANR +5.8%, CNX +3%, WLT +6.3%, CLD +4.5%, ACI -0.2%.
Thu, Oct. 30, 5:49 PM
- Despite posting a lighter than expected Q3 loss, Alpha Natural Resources (NYSE:ANR) plunged in afternoon trading after it said more production cuts are likely because the market is still oversupplied.
- "The global seaborne metallurgical coal market has shown no meaningful improvement over the last several months," ANR said, expecting more production cuts "as current prices do not allow a return for many of the global producers."
- ANR gloomy outlook for the coal markets (NYSEARCA:KOL) contrasts with that of some competitors including Peabody Energy (NYSE:BTU), which said last week that the industry may be poised to rebound from its worst downturn in decades.
Mon, Oct. 27, 3:10 PM
- Investors see that the worst may be over for the coal market after a series of output cuts around the world, according to Peabody Energy (BTU -3.3%) Chairman and CEO Greg Boyce, pointing out that coal pricing has been essentially flat for about nine months.
- "There’s going to be a long lag where you’ve got less supply than demand,” Boyce says, and "that’s going to have a strong, strong pull for the sector."
- The CEO says catalysts coal investors are anticipating include rising Chinese demand and an improvement in U.S. railroad capacity to deliver from mining regions such as Wyoming’s Powder River Basin, where BTU produces most of its thermal coal.
- ETF: KOL
Wed, Oct. 22, 10:43 AM
- BHP Billiton (BHP -1.1%) is the latest company to report record output of metallurgical coal, as extra supply far outpaces demand in countries such as China and Japan, which produce much of the world’s steel.
- BHP says it produced a record 12.8M metric tons of met coal in Q3 - including output from the major new Caval Ridge mine in Australia - up 7% Q/Q and 25% Y/Y, and Anglo American’s (OTCPK:AAUKF, OTCPK:AAUKY) H1 2014 met coal production jumped 21% Y/Y.
- The willingness to dig up more coal (NYSEARCA:KOL) despite lower prices mirrors a similar push in iron ore, where global miners miners are investing and producing more in a bet that their efficiencies of scale will allow them to profit, but critics say the strategy risks creating supply gluts that will take years to clear.
- The price for Australian premium hard coking coal has dropped 16% this year to $110/ton, near the lowest level in more than seven years and well below the $300/ton fetched in early 2011.
Fri, Oct. 10, 4:21 PM
Thu, Oct. 9, 12:19 PM
- Teck Resources (TCK -7.2%) tumbles to five-year lows after China, the world’s top coal importer, said it will levy tariffs of 3%-6% on imports of coal as of Oct. 15.
- The sudden move reintroduces taxes China had scrapped, and is seen by analysts as an attempt by the government to help its ailing domestic coal production sector.
- TCK's sales of commodities directly into China accounted for more than 26% of overall revenue in 2013, or nearly C$2.5B; it is unclear what portion of TCK’s revenues from China were generated by coal sales, but coal represented 44% of overall revenue in 2013.
- Among other top coal names: ACI -11.7%, CLF -11.5%, BTU -9.2%, WLT -7.2%, ANR -6.4%, CLD -5.5%, CNX -4.8%.
- ETF: KOL
Wed, Oct. 8, 12:24 PM
- Morgan Stanley analysts are the latest to dump on coal stocks (NYSEARCA:KOL), as it lowers its price forecast for hard coking coal to $125/ton next year and says 2015 appears likely to bring a more gradual price recovery than previously expected.
- The firm downgrades Walter Energy (WLT -10.3%) to Equal Weight from Overweight with a $4 price target, down from $16, noting that WLT likely has sufficient liquidity through 2015 but citing the uncertain timing and magnitude of a price recovery as leaving an insufficient margin of safety.
- Peabody Energy (BTU -1.2%) is the firm's preferred play in coal because it is less liquidity constrained than other coal producers; BTU "offers multiple ways to win, with diversified met, domestic thermal and seaborne thermal exposure."
- Also: ACI -6.4%, CLF -5.6%, CLD -5.2%, ANR -3.4%, OXF -2.3%.
Mon, Sep. 29, 5:53 PM
- Investors should generally stay away from coal stocks such as Arch Coal (NYSE:ACI), Alpha Natural Resources (NYSE:ANR) and Peabody Energy (NYSE:BTU) unless they are very long-term investors, J.P. Morgan’s John Bridges writes.
- Given growing supplies of natural gas and if there's no chilly winter, gas prices could weaken further and create a better buying opportunity for the coal space, the analyst says; coal bulls seem to have been seeing tax loss selling as a better opportunity than hanging on, and deep value buyers are failing to see positive catalysts.
- Bridges sees ACI and ANR as the “terrible twos," as ACI has $4.2B of net debt carried by $470M of market cap while ANR is only half as leveraged; both companies have balance sheet liquidity and have pushed out debt maturities to give themselves time for the coal market to recover, but there's no catalyst on the horizon to provide a boost.
- ETF: KOL
Fri, Sep. 26, 4:25 PM
Thu, Sep. 25, 3:40 PM
- Coal stocks take a pounding as the quarterly benchmark price for metallurgical coal drops to a six-year low, according to Doyle Trading, amid a global oversupply and a slowdown in Chinese demand (KOL -2%).
- Australian coal producers and Japanese steel mills agreed to a Q4 price of $119/metric ton, down $1 Q/Q, dashing hopes for a rebound in the steelmaking coal which has slumped 64% since reaching $330 in 2011.
- CLF -9.2%, WLB -6.6%, ANR -4.9%, ARLP -3.7%, WLT -3.5%, BTU -3%, ACI -2.9%, CLD -2%, YZC -1.9%, CNX -1.2%.
Thu, Sep. 18, 11:26 AM
- More on Goldman Sachs' downgrade of Peabody Energy (BTU -5.3%): The firm thinks coal prices are not yet close to the bottom, and it sees metallurgical coal falling as low as $120/metric ton during Q4 - bad news for all coal miners, but especially so for BTU and Alpha Natural Resources (ANR -4.1%).
- Goldman says it is focusing on three themes into year-end 2014: Avoid met coal stocks including BTU and ANR, given their high leverage and low-to-negative free cash flow; own sum-of-the-parts winners, reiterating its Buy ratings on SunCoke (SXC +1.9%) and Consol Energy (CNX -2%); prefer stronger balance sheets including SXC and CNX over weaker ones such as BTU and ANR.
- ETF: KOL
Tue, Sep. 16, 10:26 AM
- China says it will enact new laws banning the import and local sale of low-grade coal starting next year in a bid to curb its air pollution problem, with tough requirements in major coastal cities set to hit Australian miners such as BHP Billiton (BHP -0.4%), Rio Tinto (RIO -0.6%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY).
- China accounts for ~25% of Australia's coal exports, taking 54M metric tons of thermal coal and 30M metric tons of metallurgical coal from Australia in 2013; consultant Wood Mackenzie says all the thermal coal exceeded the new ash limit, while the met coal was below the limit.
- The most stringent requirements are for cities in the southern Pearl River Delta, the eastern Yangtze River Delta and three northern cities including Beijing, Tianjin and Hebei; the areas will be banned from burning coal that has more than 16% ash and 1% sulfur.
- Also, YZC -0.5%, KOL -0.4%.
KOL vs. ETF Alternatives
The Market Vectors® Coal ETF (KOL) seeks to replicate, before fees and expenses, the price and yield performance of the Market Vectors Global Coal Index (MVKOLTR), a rules-based, modified-capitalization-weighted, float-adjusted index intended to give investors exposure to the overall performance of the largest and most liquid companies in the global coal industry.
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