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Sunday, 09 May 21
HERE'S WHY INVESTORS ARE POURING MONEY INTO COAL, DESPITE ITS BLEAK FUTURE - FORBES
Coal stocks have surged this year – along with the wider energy sector – but experts warn these are likely short-term gains for an industry facing a bleak future as regulators, activists and global governments seek to cut use of fossil fuels to reduce greenhouse gas emissions.
The Coal Footprint in the USA is Bigger Than Just West Virginia
Key Facts
• Coal stocks are benefitting from the upturn in the broader energy sector on expectations of increased demand amid an economic recovery, Tony Zabiegala, chief operating officer at Strategic Wealth Partners in Independence, Ohio, told Forbes.
• Zabiegala added that while coal investors may see some near-term gains this year, they’re facing a longer-term uphill battle as the momentum of investing gravitates towards “green energy” stocks and away from fossil fuels.
• Coal stocks are also benefiting from rising prices of its main rival, natural gas, Tony Scott, managing director of analytics at BTU Analytics, a Denver-based energy analysis and consulting firm, told Forbes.
• Scott noted that some power plants located in the Midwest and Northeast, areas with access to the lowest cost coal, may switch from gas to coal as it’s cheaper to use now.
• Longer term, Scott cautioned, coal generation still “remains at risk” as both federal and state policies target lower carbon emission goals.
• Ed Egilinsky, managing director and head of alternative investments at Direxion, an exchange-traded fund provider, told Forbes that most coal stocks are micro-cap and small-cap in size, a segment of the market that has performed well this year.
Crucial Quote
“I wouldn’t touch coal stocks with a 10-foot pole now [or] in the future. With worldwide government regulation getting tighter and tighter, this presents major headwinds for coal companies. Plus, with the push for alternative energy, investors are already looking to position assets towards clean energy stocks rather than fossil fuel type of energy companies,” said Zabiegala.
Key Background
Stocks in the coal sector have jumped 33.5% year-to-date through Wednesday, according to TradingView, a trading platform, far outperforming the broader S&P 500 index which has gained about 11%. Some coal stocks, including Peabody Energy, CONSOL Energy and Hallador Energy, have surged 96.7%, 65.6%, and 64.6% year to date, respectively. However, by most parameters, the U.S. coal industry is in decline, raising questions about these companies’ long-term viability. Many major countries have planned to phase out their coal industries in the coming years, including Germany, Canada, U.K. and France. The U.S. Energy Information Administration (EIA) said that coal production in the fourth quarter of 2020 plunged 18.8% compared with the same period in 2019. Coal consumption in the U.S. dropped by 6.9% over that period. U.S. coal exports plummeted 26% between 2019 and 2020, EIA noted. Various coal-powered plants in the U.S., including American Electric Power’s Rockport plant in Indiana and The Tennessee Valley Authority, plan to shutter coal plants in the next few years.
Big Number
339. That’s how many coal-powered plants have been retired – or are on their way to shutting down – in the U.S. since 2010, according to environmentalist group the Sierra Club, while 191 plants remain active.
Surprising Fact
But the global coal industry is not dead yet. The world’s two largest coal consumers – China and India– plan to increase consumption this year, according to EIA. China and India alone account for two-thirds of global coal use to feed their escalating electricity demand. Despite China’s pledge to start phasing out coal beginning in 2026 and cut greenhouse gas emissions to net zero by 2060, Beijing officials declared that coal will remain a key part of China’s energy mix. Li Gao, head of the climate change office at China’s Ministry of Ecology and Environment, recently said China will still need to construct more coal-powered plants to guarantee a stable energy supply. Nonetheless, Zabiegala says with innovations in green energy, the global consumption of coal “will decrease-but we are several decades away from turning that corner.”
Tangent
President Biden has committed to cut greenhouse gas emissions in the U.S. by 50%-52% by 2030 over 2005 levels. Researchers, including the Center for Global Sustainability at the University of Maryland, have determined that to meet Biden’s 2030 climate goals, all remaining coal plants in the U.S. must shut down by then.
What To Watch For
Pierce Crosby, general manager, at TradingView, told Forbes that although coal and non-renewable energy companies have yet to be hit by any aggressive regulatory restrictions from the Biden administration, “if we see more demand for stricter penalties around non-renewables, these companies could sink quickly.”
Source: Forbes
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Wednesday, 07 April 21
MARKET INSIGHT - INTERMODAL
Following the end of the catholic easter, during which the majority of shipping market participants were on holidays, it is interesting to note a f ...
Wednesday, 07 April 21
COAL USED TO GENERATE ELECTRIC POWER IN U.S. WILL INCREASE BY 13 PERCENT TO 495 MMST IN 2021 - EIA
EIA expects U.S. coal production to total 585 MMst in 2021, 46 MMst (9%) more than in 2020. In 2022, EIA expects coal production to grow by an addi ...
Wednesday, 31 March 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.12 PCT - XINHUA
China Taiyuan coal transaction price index stood at 139.03 points Monday, up 0.12 percent week on week.
The index, released by China ...
Wednesday, 31 March 21
MARKET INSIGHT - INTERMODAL
Over the past week, the biggest story has been the blockage of the Suez Canal, as a result of the grounding of the container ship Ever Given. At th ...
Monday, 29 March 21
MOODY'S: OUTLOOK FOR GLOBAL METALS AND MINING INDUSTRY TURNS POSITIVE ON HIGHER EBITDA IN PANDEMIC'S WAKE
- Demand for steel, iron ore and copper will rise, while aluminum, nickel and zinc will remain in surplus
- EBITDA is expected to ...
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- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- The University of Queensland
- ASAPP Information Group - India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
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