Stephen Simpson, CFA
Wed, Jun. 22, 2:01 PM
Mon, Jan. 11, 2:49 PM
- Arch Coal (ACI -50.7%) is cut in half following news it has filed Chapter 11 bankruptcy and will be delisted from the NYSE, and the miner says its discussions with customers indicate that even after tumbling domestic coal demand the past eight years, "2016 pricing will remain weaker than previously anticipated."
- ACI's default on $3.2B of debt bring the metals and mining sector’s trailing 12-month default rate to 15% from 11% at the end of December and the default rate for the coal subsector an "unprecedented" 43%, according to Fitch Ratings.
- Analysts say investors should expect more such bankruptcies among commodity companies this year, as a strong dollar and slowing global demand growth should keep downward pressure on commodity prices.
- ACI's bankruptcy helps drag down other mining names today: BTU -19%, CNX -10.8%, YZC -2.3%, NRP -7.2%, CLD -11.4%, WLB -5.1%, ARLP +0.1%, KOL -2.6%.
Apr. 14, 2015, 12:45 PM
Apr. 8, 2015, 12:46 PM
Sep. 25, 2014, 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%.
Jul. 7, 2014, 12:44 PM
- Coal stocks suffer a beating after Deutsche Bank downgrades Peabody Energy (BTU -3.3%) to Hold from Buy with a $19 price target, down from $23, to reflect lower realized coal prices (particularly metallurgical coal) and anticipated ongoing cost pressures in foreseeable future.
- Consol Energy (CNX -1.7%) is the firm’s only Buy-rated coal stock because of the company’s “fast-growing natural gas business and solid financial position.”
- Although the Deutsche team says its focus is shifting to more company specific stories from an emphasis on sector performance, other coal companies are sharply lower: ACI -4.3%, ANR -4.8%, YZC -1.3%, CLD -2.4%, WLT -3.6%, RNO -1.5%, WLB -2%.
Apr. 24, 2014, 3:34 PM
- Peabody Energy (BTU +2.8%) powers steadily higher, reversing early losses after CEO Gregory Boyce says during this morning's earnings call that the company is looking seriously at closing some of its met coal operations.
- Some analysts also have come to BTU's defense: Brean Capital's Lucas Pipes wrote that investors should be relieved by the company’s ability to continue to navigate the low price environment relatively well, Simmons' analysts said BTU's downside guidance was reasonable given lower benchmark met and thermal coal prices ahead, and Cowen said it would be buyers on share price weakness.
- Most other coal names also are up: ANR +3.9%, ACI -1.5%, YZC +0.2%, CLD +0.4%, WLT +0.9%, CNX +2.8%.
Apr. 8, 2014, 10:42 AM
- Consol Energy's (CNX +3.6%) upgraded coal outlook is lifting coal names higher across the board: ANR +9.2%, WLT +7.4%, ACI +5.6%, YZC +5.2%, BTU +3.8%, WLB +3.1%, OXF +3%, CLD +2%, KOL +1.9%.
- Stifel raises its CNX target price to $46 from $45, reflecting the strong market for northern Appalachian thermal coal, offsetting a weaker pricing and volume outlook for met coal (Briefing.com).
Mar. 24, 2014, 8:19 AM
- Yanzhou Coal (YZC) +2.6% premarket on news it is walking away from a planned buyout of Yancoal Australia that would have taken the Australian coal producer private.
- Analysts say YZC's decision to drop its bid for the company was unsurprising given continued falls in the price of coal and in the share prices of both companies, although a deal could be resurrected in the future; thermal coal prices in Australia last week fell to ~US$73/metric ton, their lowest since late 2009.
- J.P. Morgan upgrades YZC to Overweight from Neutral, and Credit Suisse raises shares to Neutral from Underweight.
Jan. 2, 2014, 12:45 PM
Dec. 13, 2013, 10:13 AM
- The Australian government lifts certain foreign investment conditions placed on Yanzhou Coal (YZC +1.9%) which restricted its ownership of YZC's Australia unit, which operates several mines in New South Wales and Queensland.
- YZC had been required to reduce its ownership in the unit from 100% to less than 70% and its interest in other coal mining assets to less than 50% by the end of 2013, and to reduce its stake in additional mines to less than 70% by the end of 2014.
- "Since those conditions were imposed, significant challenges have emerged for the Australian coal industry," Australia's Treasurer Joe Hockey says.
Sep. 12, 2013, 10:42 AM
- China says it will aim to reduce its coal consumption to below 65% of its total primary energy use by 2017, releasing a set of new measures to improve air quality including a target to cut the density of PM2.5 and other harmful particulates in city areas by more than 10% from 2012.
- Coal (KOL) currently produces ~70% of China's power; its heavy reliance on cheap fossil fuel energy and high densities of PM2.5 - dangerous particulates with a diameter of less than 2.5 microns - have caused serious air pollution and health problems.
- WLT -3.8%, BTU -0.6%, CNX -0.3%, ACI -1.9%, ANR -2.2%, JRCC -3.2%, YZC -3.1%.
Aug. 22, 2013, 12:59 PM
- Peabody Energy (BTU +5.3%) and Consol (CNX +4.2%) help push the coal sector (KOL +4.5%) to the top of today's gainers, buoyed by signs of a manufacturing recovery in China.
- Other coal names: PCXCQ.OB +11.2%, YZC +7.7%, WLT +6.5%, ACI +6%, JRCC +5.6%, ANR +5.2%, CLD +3.9%, WLB +2.2%, NRP +1.6%, OXF +0.8%.
Jul. 24, 2013, 2:48 PM
Coal stocks (KOL -2.8%) come back to earth a day after Peabody Energy (BTU -4.9%) led S&P energy gainers upon reporting a surprising Q2 profit. Walter Energy's (WLT -17%) dividend cut and liquidity issues aren't helping. Tudor Pickering downgrades BTU, Alpha Natural (ANR -7.4%) and Arch Coal (ACI -7.1%) to Accumulate from Buy after the run-up. Also: CNX -3.4%, YZC -4%, CLD -4.1%, JRCC -4.2%.| Jul. 24, 2013, 2:48 PM | 3 Comments
Jul. 23, 2013, 12:52 PM
Although coal stocks (KOL +2.3%) remain strong after Peabody Energy (BTU +6.7%) reported better than expected Q3 earnings, Brean Capital believes results are negative for other U.S. producers: BTU cut Australian cost guidance to mid-$70s/ton, a positive for Peabody but "as long as Australian costs decline and producers there don’t have to cut [volumes]... we are unlikely to see a meaningful increase in prices."| Jul. 23, 2013, 12:52 PM | 2 Comments
Jul. 23, 2013, 9:59 AM
Coal names (KOL +2.7%) move higher in early trading, boosted by Peabody Energy's (BTU +7.4%) Q2 earnings beat and reductions in U.S. costs by 6% and Australia by 20% to mitigate a decline in U.S. shipments and falling prices for Australian coal. JRCC +11.4%, ANR +9%, ACI +7.2%, WLT +6.6%, YZC +6%, CLF +4.5%, CNX +2.4%, CLD +0.9%.| Jul. 23, 2013, 9:59 AM