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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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- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- VISA Power Limited - India
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Australian Coal Association
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
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