Arch Coal Runs out of Steam as September Starts
US Coal Shipments Keep Rising in a Tough Industry Environment
Coal ETF
During the week ending September 4, the Market Vectors Coal ETF (KOL) lost 5.2% as doubts over China’s growth prospects continued to hamper the ETF. Chinese stocks account for 25% of the ETF’s total holdings. Moreover, China, being the biggest importer and consumer of coal in the world, drives sentiments in the global coal industry.
During the same week, the broad-based SPDR S&P500 ETF (SPY) lost 5.2% as weak Chinese economic data sparked a sell-off in global equity markets.
Arch Coal
Arch Coal (ACI), which had seen a rally since mid-August on positive sentiments due to a debt exchange deal, plunged 34.1% as J.P. Morgan (JPM) published a bearish outlook on coal prices. On September 4, Arch Coal closed at $5.41, down from August 28’s $8.21 a share.
Other losers
Cloud Peak Energy (CLD) fell 11.7% during the September 4 week to close at $3.86. The stock had rallied the previous week. Last week’s fall represents a correction.
Consol Energy (CNX) continued to experience pressure, as both coal and natural gas prices have remained weak. The stock lost 6.9% to end the week at $13.4.
Peabody Energy (BTU) dropped 4.6% to end the week at $2.29.
Gainers
Westmoreland Coal Company (WLB) and Natural Resource Partners (NRP) gained 5.7% and 3.1%, respectively, defying the trend in the coal industry and broader market.
Browse this series on Market Realist: