beegdawg007

The Real Rationale Behind Current Supply and Demand for Oil and Other Commodities

>>>The US coal market is now a bear market. Coal is long term bullish but short term bearish.<<<

Careful... within the next three weeks, most of the coal companies will be announcing the settlements for 2009-10 thermal coal pricing. Almost all of the 2009 coal is already priced at prices which are 50 to 100% above the 2008 prices. JRCC for example, has most of its 2009 app thermal coal priced at $96/t vs last years price of $55/t. Despite the negative news you are hearing, the 2009 earnings year for all of the pure US thermal coal producers will be a banner/blowout year. JRCC for example will earn about $7.00 share and BTU will earn over $5.00/share. It is also worth noting that the balance sheets are in the best shape they have been in for the past ten years and most are now buying back their own shares. Also, insiders have been buying a lot of stock this past quarter.

Because their 2009 coal is all sold under contract, none of the US coal producers have any real exposure to the decline in the world economies until the second half of 2009 and than, and even than it is only the coking coal sales which will require new contracts. For the biggies like ACI, BTU and ARLP... all 2009 coal is already priced at very favorable prices! Also, China's largest supplier last week, signed three power plants to new contracts for low quality (10,000BTU/lb) thermal coal at $80US/tonne. Also, current US spot prices are still way above the cost of producing coal which is roughly $55/ton for App coal and $32/ton for Ilb, $10/t for PRC... at the current spot prices these companies would make money butt over boot day in and day out!

www.eia.doe.gov/cneaf/...

More Drama at Cleveland-Cliffs: Harbinger To Block Deal?

Here's a thought. Say I'm a hedge fund who would like to get max profits from this CLF buyout of ANRl. I already have a 16% postition in CLF so I might just act as though I'm going to scuttle the deal. As a result, ANR would trade below the offer of ..95 shares of CLF + $22 because the market does not believe it will happen. Meanwhile, I acquire either options or shares of ANR to a maximum level before I have to declare a position in the company. I than agree to allow the deal go off at the current offer! Just maybe I would have locked in a really nice premium of $25 or so on all of those ANR shares. Naw.... not possible ... nice hedgies don't do that sort of thing!