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Coal ETFs are Heating Up

By ETF Trends April 29, 2011, 05:00:42 AM EDT

Japan will experience power shortages this summer and the uncertainty is already rallying coal prices and the exchange traded funds (ETFs) that track them.

J-Power, Japan's largest coal-based thermal power producer, is already overextended - having to make up for the lost electricity of Tepco and Tohoku Electric, two utilities most impacted by the quake, reports Llana Green for MarketWatch .

Market Vectors Coal (NYSEArca: KOL) and PowerShares Global Coal (NYSEArca: PKOL) are in a profitable position as there are many factors driving the demand for this energy source. For example, the re-building of Japan will rely on coal, and thermal coal prices are higher in Australia, Indonesia, South Africa and South America. [ Will Constellation Deal Power Up Nuclear ETFs? ]

As emerging economies build up, and long term prospects for so-called clean coal technology competes with other "green energy" sources, the global demand for this commodity will rise. [ Coal ETFs: Can They Hang On To Gains? ]

Tisha Guerrero contributed to this article.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, ETFs

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