March 22, 2008 at 1:00 am by Tom Lydon
Coal is hardly glamorous - it’s got a bad reputation as a dirty pollutant, but it can be a smoking bet in an exchange traded fund (ETF).
Gold is taking the limelight at the moment, but Steve Halpern for Blogging Stocks notes that investing expert Nick Vardy is making his bet on coal. Market Vectors Coal ETF (KOL) launched earlier this year and though it’s had a lot of ups and downs, the demand for coal around the world is undeniable.
Coal supplies 25% of the world’s energy and generates 40% of the world’s electricity. Coal also plays a key role in steel production. South Africa, China and Eastern European countries are in developing mode and will continue to demand coal to fuel their growth.
Richard Gibbs, head of the economics unit at Australia’s Macquarie Bank, expects the price of thermal coal (used for heating and power) to rise more than 50% in the next year. He expects metallurgical coal (used in steel manufacturing) to hit $150 per metric ton this year.
Tags: Asia, China, Coal, Eastern Europe, Emerging Markets, Energy, KOL, South Africa, Steel
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