Moody’s sees substantive weakness ahead for North American coal

Aug. 21, 2019 6:57 PM ETVanEck Vectors Coal ETF (KOL), BTU, ARCH, ARLP, METC, WLB, CLDPQBTU, WLB, ARLP, ARCH, KOL, METC, CLDPQBy: Carl Surran, SA News Editor309 Comments
  • Moody’s cuts its 12-18 month outlook for the North American coal industry (NYSEARCA:KOL) to Negative from Stable, citing declining profitability, weakening export prices and declining demand from utilities over the next decade.
  • "The combination of a now-weakened export market and significant retirement of coal-fired power plants in 2018 is creating an oversupplied domestic market and could drive prices lower," Moody’s writes.
  • The firm sees sector EBITDA falling by more than 3% over the next 12 months, driven by a substantive decrease in thermal coal export prices - particularly in Europe amid strict environmental measures - as well as mostly open contract positions for producers.
  • Moody's says the U.S. coal sector could suffer a substantial volume reduction for the next decade, as a combination of economic, environmental and social factors continue to push utilities towards renewable energy.
  • Relevant tickers include BTU, ARCH, ARLP, METC, WLB, OTCPK:CLDPQ

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