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Wed, Oct. 15, 3:34 PM
- Peabody Energy (BTU +1.2%) has held up a bit better than most other coal stocks lately, but that does not stop Imperial Capital from assigning an Underperform rating and $5 price target to the stock.
- While BTU enjoys a stellar reputation and strong management team, the firm sees its shares and senior notes remaining under pressure from rising leverage and instability in global coal markets.
- Like more distressed coal producers, BTU's troubles stem from the debt-financed acquisition of coking coal assets in 2011 when it issued $4B of debt to purchase Macarthur Coal, Imperial adds.
- Most coal names are enjoying a nice bounce today: ANR +9.3%, ACI +8.3%, WLT +8%, CNX +3.8%, CLD +0.1%, YZC -0.8%, WLB -3%.
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%.
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%.
Mon, Jul. 7, 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%.
Fri, May. 16, 5:03 AM
- The White House is considering forcing power plants to cut carbon emissions by 25% over a 15-year period, Bloomberg reports.
- The problem is that owners can only cut so much of a facility's emissions by increasing efficiency, so a lot of the reduction could have to come by "going outside the fence," such as by deepening the use of renewable energy, improving grid efficiency and encouraging customers to use less electricity.
- Trying to compel operators to rely on such external measures could run afoul of what the government is allowed to do under the Clean Air Act.
- ETFs: KOL, XLU, IDU, VPU, RYU, PUI, UPW, FXU, SDP, PSCU, FUTY, UTLT
- Coal Tickers: PCXCQ, BTU, WLT, CNX, ACI, ANR, JRCC, YZC, ARLP, AHGP, NRP, PVR, PVG, PVA, OXF, CLD, WLB, RNO
- Utilities: ED, POM, PEG, FE, NST, UTL, ETR, EXC, D, NU, PCG, DUK
Thu, Apr. 24, 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%.
Tue, Apr. 15, 2:26 PM
- The D.C. Court of Appeals upholds EPA regulations requiring power plants to limit emissions hazardous air pollutants, siding with the EPA's determination that its regulations were appropriate and necessary.
- The 2-1 court majority rejects arguments the agency should have considered the costs of its regulations before moving forward, while the dissenting judge warns the costs of the EPA regulations would amount to more than $9B/year.
- Related tickers: KOL, BTU, WLT, CNX, ACI, ANR, JRCC, YZC, PCXCQ, ARLP, NRP, PVR, PVA, OXF, CLD, WLB
Tue, Apr. 8, 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).
Wed, Apr. 2, 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%.
Tue, Mar. 25, 8:04 AM
- Yanzhou Coal (YZC) says it plans to slash ~18% of its workforce in China over the next three years and restructure the senior management of its Australia unit, as part of efforts to cut costs and slog through the weak global coal market.
- It's the latest in a string of job cuts, asset sales and reduced spending plans by global mining companies including BHP, Glencore and Vale, in response to oversupply and slowing demand growth in China and elsewhere in Asia for coal, iron ore and other mining products.
- China's domestic thermal coal prices have fallen more than 15% YTD to ~$87/metric ton, and prices for Australian thermal coal last week fell to ~$73, their lowest since late 2009.
Mon, Mar. 24, 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.
Thu, Jan. 2, 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.
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.
Nov. 29, 2013, 3:03 PM
- China awaits anxiously to determine whether the Australian government's rejection of Archer Daniels Midland's takeover bid for GrainCorp was a one-off or a sign of an interventionist future.
- State Grid Corp. of China’s bid to purchase Australian power assets from Singapore Power, valued at ~A$7.4B including debt, may be the easiest to green light given the assets are already foreign owned and heavily regulated.
- More troublesome is Yanzhou Coal's (YZC) plan to buy the 22% of Yancoal Australia it doesn't already own, and delist the company; the deal would require the government to overturn conditions it set when YZC took over Yancoal's predecessor in 2009.
- Allowing YZC to renegotiate its commitments to the government could set a precedent for future deals, something Treasurer Joe Hockey may prefer to avoid.
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%.
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