For Immediate Release
Chicago, IL - December 14, 2011 - Today, Zacks Equity Research
discusses the Coal, including
Peabody Energy Corporation
(
BTU
),
CONSOL Energy Inc.
(
CNX
),
James River Coal Co.
(
JRCC
) and
Cloud Peak Energy
(
CLD
).
A synopsis of today's Industry Outlook is presented below. The
full article can be read at
http://www.zacks.com/stock/news/66230/Coal+Industry+Stock+Review+-+November+2011
According to EIA's "Short-term Energy Outlook," U.S. coal
exports rose to 54 MMst during the first half of 2011, the highest
since 1982, representing about 35% compared with the same period in
2010. U.S. coal exports likely remained elevated in the second half
of 2011, reaching an annual total of 102 MMst. Exports are expected
to decline to 91 MMst in 2012, as supply from other major
coal-exporting countries recovers from disruptions.
Demand for U.S. coal was also strong in the third quarter. This was
mainly driven by increased coal imports in China, South Korea,
India and Europe. China net coal imports just hit an all-time high
in September. South Korea's coal imports also have set records
recently, and India's thermal coal imports are up more than 40%
year-to-date.
Additionally, coal trade in the U.S. continues to benefit from
favorable prices for the shipments made. Per the EIA's latest
report, average delivered coal prices to the electric power sector
have increased steadily over the last 10 years by an average of
6.7% each year. The EIA sees this trend continuing in 2011, largely
because of a rise in transportation costs.
The projected average delivered coal price to the electric power
sector, which was $2.26 per MMBtu in 2010, rises to $2.41 per MMBtu
in 2011 and $2.44 per MMBtu in 2012.
Demand Upsurge in Asian Countries:
The increases in coal demand in Asian economies like China
and India have been a key price driver since the end of the
recession in 2009. We expect this trend to continue in future
mainly due to the growing energy needs in India, China, South Korea
and Europe.
China, the world's fastest growing major economy, has massive coal
reserves. However, its domestic coal production continues to fall
short of meeting its rapidly growing demand for coal, resulting in
the continuous rise in coal imports. China has since overtaken the
U.S. as the world's largest consumer of coal.
Similarly, in India, the rising population and economic growth
continue to call for increased coal consumption for electricity
generation. Coal accounts for nearly 55% of the country's energy
consumption needs. The last four decades have seen the country's
commercial energy consumption rise by about 700%. Going forward,
India plans to double electricity generation capacity by 2012,
which could see the country importing in excess of 200 million tons
of coal.
Given the growing demand from the fast-growing Asian economies, we
find companies exporting coal to the emerging regions attractive
for investment. Some of the names are
Peabody Energy Corporation
(
BTU
) and
CONSOL Energy Inc.
(
CNX
). Other key thermal coal players who stand to benefit from the
increasing demand for coal include
James River Coal Co.
(
JRCC
) and
Cloud Peak Energy
(
CLD
).
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PEABODY ENERGY (
BTU
): Free Stock Analysis Report
CLOUD PEAK EGY (
CLD
): Free Stock Analysis Report
CONSOL ENERGY (
CNX
): Free Stock Analysis Report
JAMES RIVER CL (
JRCC
): Free Stock Analysis Report
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Research