Could the industry’s run be winding down? A poor economy, very low natural gas prices and lower export demand have all contributed to the diminished total demand for coal, according to The Business Insider. Additionally, producers failed to match the market with production cuts and inventories are estimated to stand at a minimum of 50 million tons of excess inventory in the United States.

Nevertheless, coal equities have done quite well for the year, with coal companies doubling or tripling off spring lows. The industry is currently trying to salvage revenue by drastically cutting production and an optimistic forecast puts the resolution of the glut by mid-2010.

A heavier hand by federal regulators has improved miner safety, but the high costs attached to the regulations has put many small companies out of business in Central Appalachia. The Environmental Protection Agency is also scrutinizing mine permits, which will likely raise production costs and restrain supply in the future. (Why Coal ETFs?)

Meanwhile, coal ETFs could be adding a new holding if Rio Tinto’s (NYSE: RTP) IPO of its U.S. coal business, Cloud Peak (NYSE: CLD), goes through, Benzinga reports.

For more information on coal, visit our coal category.

• Market Vectors Coal ETF (NYSEArca: KOL): which is up 133.1% year-to-date

• PowerShares Global Coal Portfolio (NASDAQ: PKOL): which is up 125.8% year-to-date.

Max Chen contributed to this article.

Coal. China has reduced its supply of coal by clamping down on pollution while demand remains unchanged, which could result in higher prices for the commodity. Now, China will need to import coal to maintain its production and power plants. Coal is the world’s fastest-growing fuel based on consumption. Coal is also a major component in producing steel. (More on coal here).

• Market Vectors Coal ETF (NYSEArca: KOL): up 184.3% since low; up 121.7% year-to-date

Steel. Steel has experienced rising popularity as the global infrastructure sector recovers and automakers increase demand. The Chinese markets and the U.S. dollar weakness has helped prop up the base metals market. (Four ways to play base metals).

• Market Vectors Steel Index ETF Fund (NYSEArca: SLX): up 147.7% since low; up 95.4% year-to-date

Metals & Mining. These funds track indexes made up of the stock of commodity producers. One argument in favor of investing in hard asset equity ETFs is that you may know a little about a particular commodity, but the person running a company involved in mining or producing that commodity is duty-bound to know a whole lot more. Commodity producers can make brilliant business decisions, and they can also benefit when new mines are discovered. They can also cut costs and boost profits. (The benefits of hard assets).

• SPDR S&P Metals & Mining (NYSEArca: XME): up 123.1% since low; up 74.3% year-to-date

Basic Materials. Base metal prices have jumped as demand for the metals increase, more notably from China as the country recovers and hoards metals. Base metals should continue their upward journey as fundamentals in a global recovery strengthen. (More on China’s shopping spree).

• iShares Dow Jones U.S. Basic Materials (NYSEArca: IYM): up 100.9% since low; up 58.5% year-to-date

Copper. Copper prices are at their highest levels in 13 months, thanks to both a drooping dollar and concerns about supply of the metal. Prices have doubled this year, mostly because China stepped up its demand as its economy recovered. Analysts also predict that copper will be the top performer among base metals. (Where copper is going).

• iPath Dow Jones AIG Copper TR Sub Index ETN (NYSEArca: JJC): up 81.3% since low; up 112.7% year-to-date

Commodities have been on a hot streak, but as we’ve learned from recent bubbles, it’s wise to have an exit strategy in the event of a correction. You can read more about strategies here.

For full disclosure, Tom Lydon’s clients own shares of IYM.

Max Chen contributed to this article.

China, one of the world’s biggest polluters, is becoming more environmentally conscientious. As a result, the government has started to crackdown on illegal coal mines, lead smelters and other highly pollutant facilities, writes Tony Daltorio for Investment U. The government crackdown may not concern a  foreign investor until one stops to think about the economic implications.

Simple economic supply and demand shows that China has reduced supply of both coal and lead by clamping down on pollution while demand remains unchanged, which could result in higher prices for both products. Now, China has to import coal and at a higher price for steel production and power plants.

China is also the world’s largest producer and consumer of lead. Global inventories of lead is already relatively low and China’s recent increased demand of lead resulted in lead prices that are higher than they’ve been for a year.

If China continues on its newfound environmentally friendly path, the country will probably have to import more when seasonal consumption trends kick in, which would further drive up prices.

• Market Vectors Coal (NYSEArca: KOL)

• PowerShares Global Coal Portfolio (NASDAQ: PKOL)

• iPath Dow Jones – UBS Lead ETN (NYSE: LD)

For more information on commodities, visit our commodity category.

Max Chen contributed to this article.

In fact, coal is the world’s fastest-growing fuel based on consumption. So much so that it leaves crude oil and natural gas in the dust.  The demand is on the rise, too: consumption of coal grew by 5.7% over the past five years, compared to 1.4% for oil and 3% for natural gas. This trend is expected to remain in place as populations grow. Global demand for the dark commodity is expected to grow 55% by 2025, states Sham Gad of Investopedia.

There is an abundant supply of coal, enough to last the United States for decades, if not centuries, and it is one of the most inexpensive energy sources around.  Lastly, as industrial production improves and the demand for steel increases, the demand for coking coal, the coal used in making steel, is expected to increase, states the Associated Press.

Although coal seems like a winner, there are negative aspects of the energy producing commodity.  The biggest disadvantage of coal is the hazardous gases it produces in the atmosphere when it is burned.  However, clean technology has come a long way, such as carbon-capture technology, which many hope will mitigate the negative effects of coal.

• Market Vectors Coal ETF (NYSEArca: KOL): which is up 110.9% year-to-date

• PowerShares Global Coal Portfolio (NASDAQ:PKOL): which is up 102% year-to-date.

For more stories on coal, visit our coal category.

Kevin Grewal contributed to this article.

Specialty-sector ETFs, or “thematic” ETFs, have become a hit with investors, covering more than 40 unique themes in the market with more than $10 billion in assets under management, according to IndexUniverse.

While some consider thematic ETFs “gimmicky” and believe these forms of ETFs are only popular when the media is hyping the sector, they have their advantages and an investor should be aware that such options are available.

Specialty ETFs can help round out a portfolio and allow investors to take advantage of different segments of the market. To spot opportunities, watch the trend lines.

Alternative energy. Skyrocketing energy prices have brought more investor interest to all sorts of energy investments. The largest alternative energy ETF is PowerShares WilderHill Clean Energy Portfolio (NYSE Arca: PBW), currently up 23.4% year-to-date, with $743 million in assets under management. PBW is more focused on U.S.-listed companies.

Coal. The cheapest energy source of BTUs. Ever-increasing oil prices are encouraging the development of the coal. The largest coal ETF is Market Vectors Coal ETF (NYSE Arca: KOL), currently up 1.3.4% with $277 million in assets. KOL primarily includes mid-cap miners, weighted 49% in U.S. companies, 23% in China and 15% in Indonesia.

Nuclear. Once operational, nuclear power is seen as the cheapest kind of energy, but the industry is still grappling with the issue of nuclear waste. The largest nuclear ETF is Market Vectors Nuclear Energy ETF (NYSE Arca: NLR),  currently up 21.7% year-to-date, with $166 million in assets. NLR has a 40% allocation to uranium miners, with other weightings in power generation and plant construction firms.

Commodities. ETFs are an easy way for a commodity trader to access this area of the market. The largest hard asset commodity ETF is Market Vectors Agribusiness ETF (NYSEArca: MOO), currently up 40% year-to-date, with $1.5 billion in assets. Other areas include water resources, steel, timber and broad-based commodities.

Infrastructure. Infrastructure covers companies involved in construction and repair of roads and bridges, building and maintaining power grids, telecommunication networks and sewage systems. Worldwide stimulus funds have been steadily injecting more money into the sector. The largest infrastructure ETF is iShares S&P Global Infrastructure Index Fund (NYSE Arca: IGF), currently up 12.9% year-to-date, with $267 million in assets.

Transportation. There’s no denying the economic impact of transport systems. The Claymore/Delta Global Shipping ETF (NYSE Arca: SEA) is currently up 25.9% year-to-date, with more than $70 million in assets. SEA is a good indicator for economic activity and commodities demand.

Green. The green sector provides environmentally-friendly technology for an evolving society. The largest green ETF is PowerShares Cleantech Portfolio (NYSE Arca: PZD), currently up 29.8% year-to-date, with $145 million in assets. PZD tracks the performance of companies whose products improve productivity while reducing consumption of natural resources.

Other. Or “miscellaneous” category that includes gaming, luxury items and Chinese real estate to name a few. The largest ETF in this area would have to be Market Vectors Gaming ETF (NYSE Arca: BJK), currently up 46.7% year-to-date, with $108 million in assets. BJK tracks global gaming companies.

Max Chen contributed to this article.

The basic principles of supply and demand have lead demand for coal to decline while supply has remained relatively stable.  As a result, the price of South African coal has slid the most in 11 weeks.  In fact, at current rates, 58.5 million tons of coal will ship from South Africa as compared to a capacity of 76 million tons and 61.79 million tons in 2008, states Alistar Holloway of Bloomberg.

China is expected to issue a set of regulations for its domestic thermal coal market. It’s hoped that this would pave a path to resolve the deadlock in prices of coal in the nation, which could potentially put a damper on the nation’s demand for imported coal.  China already produces enough coal to meet its own demand,  but it imports coal when foreign prices are lower than domestic prices, states Eadie Chen and Fayen Wong of Reuters.

Alpha Natural Resources said that while inventories of thermal coal are historically high, this situation could flip-flop in the next year where demand could exceed supply, reports Liezel Hill for Mining Weekly. Alpha Natural is the United States’ third-largest coal producer.

Coal ETFs are up a whopping 150% off the market’s March 9 lows. If you’re considering this area as an investment, be sure to mind the trend lines and let them tell you where the trend is going. Then act accordingly.

• Market Vectors Coal (NYSEArca: KOL): up 97.7% year-to-date

• PowerShares Global Coal Portfolio (NASDAQ: PKOL): up 92.4% year-to-date

For more stories on coal, visit our coal category.

Kevin Grewal contributed to this article.

Remember, though, that while forecasts are informative, unforeseen events could cause the reality to play out differently. While you keep these predictions in mind, have an entry and exit strategy if you’re thinking of investing in energy ETFs.

• U.S. Crude Oil. Crude oil prices are going to remain volatile, while the WTI spot price is projected to rise slowly as economic conditions improve, to an average of about $72 per barrel in 2010. Expect crude prices to hover around $70 per barrel for the fourth quarter. United States Oil (USO) is up 15.7% year-to-date

• Gasoline. The average price for regular-grade gasoline, which reached a summer peak of $2.69 per gallon in EIA’s June 22 weekly survey, fell by more than 20 cents per gallon in  the four weeks following the drop in crude oil prices. Now, however, they’re bouncing back. EIA expects the annual average regular-grade gasoline retail price in 2009 to be $2.34 per gallon.  Higher projected crude oil prices next year are expected to increase the average price to $2.66 per gallon in 2010. United States Gasoline (UGA) is up 82.2% year-to-date

• Natural Gas. Natural gas inventories are expected to set a new record high at the end of this year’s injection season (Oct. 31). Natural gas production is projected to remain flat this year, then fall by 2.8% in 2010. United States Natural Gas (UNG) is down 49.6% year-to-date

• Coal. Coal consumption in the electric power sector has declined 6.4%, but it’s expected to climb 1.3% in 2010. Coal production is projected to drop off by 8% this year, thanks to lower consumption, fewer exports and higher inventories. That trend is predicted to continue into 2010. Market Vectors Coal (KOL) is up 94.4% year-to-date

• Electricity Total retail sales of electricity are projected to decline by 2.7% throughout the United States during 2009.  Sales in the industrial sector are projected to decrease by about 10% this year because of the weak economy. For 2010, a 0.8% rise is expected. iShares Dow Jones U.S. Utility Index (IDU) up 5.7% year-to-date

For more stories about commodities, visit our commodity category.

• Demand from China. Coal is the primary source of energy within the country of China, and the need for more of the commodity is so strong that 16.07 million tons of coal was imported in June. Coal also accounts for 25% of the world’s energy needs.

Tony Sagami for Uncommon Wisdom reports that coal is so cheap and abundant that China is building coal-fired plants at a fast pace because it is the sole supplier of electricity  in the country. China is set to use 3.4 billion tons of coal by the year 2020.

Likewise, remember that steel production also requires coal, and China is on the fast track for industrialization. China is also the number one producer of stainless steel, which uses coal in the production process.

• Interest in alternative energy. The alarms have been sounded: we’re quickly running out of oil. This impending threat has investors seeking out other forms of energy, including solar, wind and yes, even coal. While the debate about how “clean” clean coal actually can be rages on, it hasn’t stopped investors from taking a gander. It’s generating even more interest as oil hits 10-month highs.

ETFs to watch for signs of more activity in the coal industry include:

• Market Vectors Coal ETF (KOL): up 89.6% year-to-date

• PowerShares Global Coal (PKOL): up 84.3% year-to-date

For more stories about coal, visit our coal category.

There have been a number of stellar performers in recent weeks – these are just a few that caught our notice. Bear in mind that wherever you choose to place your money, always have a strategy for both entry and exit, since no trend lasts forever.

Turkey has several factors in its favor: the central bank has reduced rates to its lo a record low, consumer confidence is on the rise and jobless claims are declining. The country’s stocks have recently recovered to pre-crisis levels and it is reflected in the country’s ETFs.

• iShares MSCI Turkey Invest Mkt Index (TUR): up 76% year-to-date; up 19.5% in the last two weeks

Oil is what makes the world go ’round, and the price of oil may continue to rise as economies recover. Once the global economy sees normalcy, some feel that it’s likely that oil will see higher demand and a lower supply, which would naturally result in the higher price of oil and gas at the pumps.

• United States Gasoline (UGA): up 82.1% year-to-date; up 14.5% in the last  two weeks

Coal has a couple of good things going for the sector: reduction in capital expenditure by producers, a weaker U.S. dollar, as well as increases in both steel and electricity consumption. Lobbyists are also fighting on Capitol Hill for more perks for the industry.

• Market Vectors Coal ETF (KOL): up 93% year-to-date; up 14.9% in the last two weeks

In retail, some high-end consumers are increasing their intake of goods. Many countries are reporting rises in exports and trade surplus, and some luxury retailers are quietly discounting items to drum up more business. So far, the tactic seems to be working.

• Claymore/Robb Report Global Luxury (ROB): up 32.4% year-to-date; up 11.9% in the last two weeks

The ETF that tracks regional banks is producing impressive results considering that many believe regional banks are closing or in trouble because of commercial REITs. MarketWatch says strong profits and good reports from large banks has helped buoy the financial sector and regional banks may be along for the ride.

• SPDR KBW Regional Banking (KRE): down 25.2% year-to-date; up 23.7% in the last two weeks

Max Chen contributed to this article.

The Waxman-Markey bill rode through the House and is now in the Senate. Two major industries are fixed against one another in an effort to sway lawmakers in order to get some “goodies” for themselves in any legislation.

The two power sources are coal and natural gas. While coal is leading the push, thanks to heavy lobbying, natural gas executives are forming a strategy to influence rewrites in the Senate, explains Anne C. Mulkern for The New York Times.

Natural gas is lagging behind its competitors as coal supporters have been talking to senators and aides for months, with their contacts becoming more frequent since the House bill passed. Coal lobbyists want to slow down the pace of the House measure’s plan to cap greenhouse gas emissions and make businesses buy allowances for those emissions.

Natural gas has the added obstacle of competing with the utility industry, which has been active in lobbying legislation. Utilities have a solid reason to favor coal, however, both natural gas and coal are represented in the utility industry. Which commodity can sway in terms of public relations will be determined.

ETFs and ETNs possibly affected:

• Market Vectors Coal (KOL): up 46.1% year-to-date

• PowerShares Global Coal (PKOL): up 40.6% year-to-date
  

• United States Natural Gas Fund (UNG): down 48.1% year-to-date

• iPath Dow Jones AIG Natural Gas Total Return (GAZ)
  

For more stories about coal and natural gas, visit our commodity cateogry.