The global coal markets have been on a tear lately. And America’s miners still are tanking.
Blame natural gas. St. Louis-based miner Foresight Energy LP is having its worst month in three years as cheap gas continues to push the fuel out of the U.S. power mix. Alliance Resource Partners LP and Consol Energy Inc. are similarly down 10% since mid-March.
All three miners depend heavily on exports to make money, so the fact that they aren’t rallying as global coal prices gain show just how fierce their competition against shale gas in the United States has become. Gas futures have fallen by more than 10% in the past month, making the cleaner-burning fuel more attractive to power generators. Gas dethroned coal as the biggest source of power in America four years ago.
Coal prices have rebounded to “OK levels,” Clarksons Platou Securities analyst Jeremy Sussman said. And “just OK levels are still a problem when natural gas is at $2.50” per million British thermal units, a three-year low.
Meanwhile, coal prices at Newcastle, Australia, a benchmark for Asia, have gained in the past two weeks as stockpiles at power plants in China declined. Coal for delivery to Europe has climbed more than 10%, to almost $64 a metric ton.