The ongoing shale oil boom has pressured natural gas prices and made natgas a cheap alternative to coal. Additionally, new environmental regulations have forced coal-fired power plants to close, and many are being replaced with natural gas.
Moreover, China, the world’s largest consumer of coal, is beginning to diminish its reliance on coal in favor of alternative renewable energy sources as pollution becomes a major concern and clean energy becomes cheaper. According to Bloomberg analysts, about two-thirds of money spent on adding new electricity capacity worldwide will go to renewable between now and 2040.
“The benchmark contract for the coal may gain by a few dollars in the second quarter amid speculation that China is curtailing supply amid high costs, Mark Levin, a coal analyst at BB&T Capital Markets in Richmond, Virginia, said in a note to clients on Friday. An increase would pause a rout that began in 2011 when prices peaked at $330 a metric ton,” Bloomberg reported.
Market Vectors Coal ETF
