We have been negative on coal stocks for a while. Now there appears to be a wider recognition of the fundamental reasons as evidenced by the following excerpts from an article in WSJ today:

The Wall Street Journal reports U.S. coal stockpiles are climbing as supplies outpace demand from utilities and factories. The glut means miners will have to slash output, compounding the industry downdraft and pointing toward depressed prices and possibly layoffs as miners continue to grapple with uncertainty over climate legislation. Overseas markets can offer a buffer for some miners, however. Meanwhile, less-expensive coal helps hold down inflationary pressure for customers, which include utilities and steelmakers, and gives the economy the benefit of cheaper power. Despite a recent slight pickup in industrial activity across the U.S. economy, coal prices remain depressed in the major coal-producing areas, from underground mines in West Virginia to big open-pit mines in Wyoming. The benchmark price for Central Appalachian coal, which makes up 20% of U.S. production, is roughly $54 dollars a ton, down from $111 a year ago. The benchmark price for Powder River Basin coal, mostly from Wyoming and accounting for 40% of U.S. production, is about $8.25 a ton, compared with $14.50 dollars a year ago. Appalachian coal generally yields more energy than that from the West. Mild weather this summer and switching by utilities to low-cost natural gas for fuel has contributed to lower coal use. That led to mountains of coal at electricity producers. Coal stockpiles at utilities, the biggest consumers of coal in the U.S., hit 199.7 million tons in September, up 37% from a year earlier, according to the U.S. Energy Information Administration

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