“Sustained natural gas prices will prop up demand for the thermal coal used in power production through mid-2014 to early 2015, Anna Zubets-Anderson says, while supply rationalization should help stabilize prices for metallurgical coal, which is used in steelmaking. Nonetheless, the US coal industry has little room left to cut costs, and will earn lower EBITDA in 2013 than in 2012 due to lower prices, before EBITDA flattens in 2014,” said Moody’s in August.
Goldman did say that prices of metallurgical coal, the coal grade used to make steel, have bottomed. That could be good news for Peabody Energy (NYSE: BTU), one of the largest U.S. metallurgical coal produces and KOL’s fourth-largest holding.
Market Vectors Coal ETF
ETF Trends editorial team contributed to this post.
