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).
Apr. 4, 2014, 4:17 PM
Apr. 2, 2014, 3:58 PM
- Coal stocks are higher after the head of BHP Billiiton's (BHP +0.9%) coal division said he expects world demand for coal to increase for decades to come, and that most demand growth for coal will come from outside China, which has been the primary driver of global commodity prices in recent years.
- The BHP exec also noted that coal demand in Europe is rising as nuclear plants are set to shut down and countries reduce their imports on Russian energy.
- The Market Vectors Coal ETF (KOL +0.7%) has gained 3.2% over the past week and is trading above its 200-day moving average, but the ETF is still down 4.2% YTD.
- JRCC +20.5%, OXF +4.5%, WLT +2.2%, CNX +2.1%, CLD +2%, ANR +1.9%, BTU +1.4%, YZC +0.6%, ACI -0.2%, WLB -1.2%.
Apr. 2, 2014, 9:18 AM
- BHP Billiton (BHP) coal president Dean Dalla Valle expects little near-term improvement in coal prices (KOL), believing the market likely will remain oversupplied for some time, but remains optimistic about long-term demand.
- Dalla Valle expects most demand growth to come from outside China, which has been the primary driver of global commodity prices in recent years and now accounts for about half of the world's coal consumption.
- "These recent drops in prices should be viewed in perspective," given prices still remain well above historic lows, Dalla Valle says, while not ruling out selling some coal mines, such as mines in South Africa and its stake in the Cerrejon mine in Colombia.
Mar. 29, 2014, 8:25 AM
- The Obama administration is proposing rules to cut methane emissions at sites from landfills to coal mines, laying the groundwork for regulations that could affect the energy and agriculture industries.
- The first big target is the oil industry, with new Interior Department regulations coming later this year to curb venting and flaring of natural gas at wells on public lands and further air mandates possible from the EPA by 2016.
- The oil industry says energy firms already are taking steps to plug methane leaks and capture natural gas flowing out of oil wells, and that additional regulations "could have a chilling effect on the American energy renaissance."
- Agriculture accounts for 36% of human-related methane produced in the U.S., yet proposals for curbing gas emitted by livestock rely strictly on voluntary measures that are largely already under way.
- ETFs: XLE, ERX, KOL, OIH, VDE, ERY, FCG, XOP, DIG, DUG, GASL, FRAK, XES, IYE, IEO, IEZ, GASX, PXE, PXJ, PXI, PSCE, FENY, FXN, RYE, DDG
Mar. 21, 2014, 10:35 AM
- Walter Energy (WLT +6.2%) bounces from yesterday's plunge, with Morgan Stanley's Evan Kurtz saying Wednesday's debt offering gives the company sufficient liquidity to make it into 2017 even if the price of met coal doesn't recover.
- The met coal weakness - with spot prices below cash costs of 89% of global seaborne producers - is unsustainable in the view of his team, but nevertheless, it's altered its bear case to a world where prices never again rise above $160 per ton. In this instance, the PT on WLT would be $2.
- Others bouncing today: Arch Coal (ACI +2.6%), Alpha Natural Resources (ANR +2.4%), Peabody Energy (BTU +1.1%), Consol Energy (CNX +0.9%).
- KOL +2.5%
Mar. 20, 2014, 8:15 AM
- Walter Energy (WLT) -11.4% premarket as BofA/Merrill comes out deeply negative on the coal sector (KOL), expecting depressed fundamentals over the next several years due to oversupply and reluctance to shut capacity.
- On WLT, the firm fears the company is likely to face liquidity issues and cuts its price target on the shares to $2 from $8 "even assuming what we believe to be a best-case cost scenario."
- ACI -2.5%, BTU -2.3%, ANR -1.5% premarket.
Mar. 7, 2014, 12:39 PM
- Alpha Natural Resources (ANR -9.4%) is hit hard after Goldman Sachs last night cut its rating on the shares to Sell and lowered its price estimates for coal; other sector names are following suit.
- Goldman also cut its price estimate for met coal this year to $141/metric ton from $150 and lowered projections for next year and 2016 following increased Australian output, an expected slowdown in the growth of Chinese imports, and “limited U.S. supply rationalization."
- The firm maintains a Neutral rating on Walter Energy (WLT -5.6%) but cuts its price target to $10 from $12.
- Also: BTU -4.2%, ACI -4%, CNX -1.5%, OXF -1.6%, JRCC -1.5%, CLD -0.7%, KOL -2.1%.
Jan. 10, 2014, 4:31 PM
Jan. 8, 2014, 4:53 AM
- Leading members of the House and Senate appropriations committees met yesterday as they sought to reach a deal on how to spend the $1.01T that Congress approved for this fiscal year.
- Negotiators are working on final sticking points involving healthcare and military spending, although they only have until January 15 to avoid another government shutdown. There's talk of a short-term measure lasting just days to avoid that scenario.
- Any defense cuts could affect government contractors such as Lockheed Martin (LMT), Boeing (BA) and General Dynamics (GD).
- Legislators are also discussing whether to include House-proposed limits on EPA regulations that are opposed by the coal (KOL) and agriculture sectors.
- Top coal names: BTU, ACI, ANR, CLD, CNX, JRCC, WLT.
Jan. 7, 2014, 4:58 PM
- Coal stocks (KOL) had a terrible 2013 amid much improved second halves, but with coal getting hit early this year, Ben Levisohn wonders if the coal boomlet has run its course.
- The commodity currencies remain under pressure in a well supplied commodities market and weakening Chinese growth, J.P. Morgan's John Bridges explains, as the firm lowers its coking coal benchmark forecasts by $10/ton for 2014 and 2015; however, rail companies may relinquish some margin to support U.S. met coal after benefiting from sharply higher freight rates as the coking coal price peaked.
- In today's trade, ANR -6.3%, CNX -1.4%, BTU -1%, ACI -2%, WLT -4.5%, JRCC -2.1%.
- Yesterday: Despite the gas boom, U.S. coal isn't dead.
Jan. 6, 2014, 5:48 PM
- Coal companies (KOL) have been closing mines and laying off workers, but coal isn't going away: Coal remains the biggest source of fuel for generating electricity in the U.S. even as production leaves Appalachia in favor of places such as Wyoming, and exports are growing fast.
- One reason coal won't disappear soon is that regulators are reluctant to let utilities become too dependent on natural gas, fearing that a sudden price jump could send electricity prices soaring; also, utilities have billions of dollars invested in plants that haven't been paid off.
- Overall, U.S. coal production is projected to remain relatively constant over the next three decades, according to the U.S. Energy Information Administration (EIA's quarterly coal report).
- Top coal names: BTU, ACI, ANR, CLD, CNX, JRCC, WLT.
Dec. 17, 2013, 3:24 PM
- Broadwind Energy (BWEN +14.4%) is set to be a major beneficiary of Siemens $1B-plus power contract with MidAmerican Energy, supplying the towers for the 448 wind turbines that will equip five wind power projects in Iowa.
- The move by Warren Buffett’s utility company shows how a drop in equipment costs is making renewable energy more competitive with power from fossil fuels - a boost for suppliers including BWEN, Siemens (SI), GE and Vestas (VWDRY, VWSYF), and a threat to coal miners (KOL).
- MidAmerican expects to close some coal-powered plants in 2015 as the price of wind power (FAN) continues to slide, an exec says.
Dec. 10, 2013, 6:50 PM
- Supreme Court justices today expressed sympathy for the EPA’s approach to air pollution that crosses state lines.
- The rule that would curb emissions from coal-fired power plants in 28 states - struck down by the D.C. Circuit Court of Appeals and being tested by power companies, states and miners - has never taken effect, but it would force companies to either shutter old plants or invest billions of dollars in pollution-control technology.
- The court’s four Democrat appointees, at times joined by Chief Justice Roberts and Justice Kennedy, suggested the EPA had adhered to the language of the Clean Air Act; only Justice Scalia seemed convinced the rule could be unfair to some states.
- ETFs: KOL, XLU, IDU, VPU, RYU, PUI, UPW, FXU, SDP, PSCU, FUTY, UTLT.
- Coal names: PCXCQ, BTU, WLT, CNX, ACI, ANR, JRCC, YZC, ARLP, AHGP, NRP, PVR, PVG, PVA, OXF, CLD, WLB, RNO.
Dec. 2, 2013, 3:52 PM
- The late-day rise in coal stocks (KOL) is attributed to comments by the EPA's Gina McCarthy that the agency would give states "significant flexibility" in meeting carbon emission requirements from power plants; the EPA will propose the standards next June, McCarthy says.
- Analysts say such flexibility would be especially positive for James River Coal (JRCC +9.7%), whose shares momentarily popped 25% before calming down a bit.
- Also: ACI +3%, ANR +1.4%, BTU +0.6%, WLT +1.3%, CNX +1.6%, CLD +0.8%, ARLP -0.2%.
Nov. 30, 2013, 8:25 AM
- Coal (KOL) has regained a little ground this year as the fuel of choice for U.S. power plants, but not in Appalachia, where natural gas for electricity generation has become very cheap.
- So much gas is being pumped from the Marcellus Shale, and so few pipelines serve the area, that a glut has developed in Pennsylvania and West Virginia, driving down the price of electricity and making it hard for coal to compete, WSJ reports.
- FirstEnergy (FE) stopped generating power in October at two plants in the area, and AES has told regulators it may close its Beaver Valley coal plant near Pittsburgh; analysts think more closures are likely in the region.
- As natural gas prices have crept up closer to $4/M BTUs, coal recovered some of its market share, but gas in Pennsylvania is going for as low as $1.83; the longer gas and electricity prices stay low, the more likely it is that commercial coal plant owners could shut plants or file for bankruptcy.
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