Previously downtrodden mining and materials exchange traded funds have rebounded in significant fashion this year as highlighted by the Market Vectors-Coal ETF (NYSEArca: KOL), which is up more than 32% on a year-to-date basis.
KOL strutted its stuff yesterday, rising nearly 3.8% despite news of Peabody Energy (NYSE: BTU), once the largest U.S. coal producer, filing for bankruptcy protection. The coal industry is weakening as U.S. power plants switch to natural gas, environmental restrictions take hold and the world makes a stink eye at heavy greenhouse gas energy sources, reports Tom Randall for Bloomberg.
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.[related_stories]
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.