The VanEck Vectors Coal ETF (NYSEArca: KOL) is down nearly 3% year-to-date, an undoubtedly disappointing performance after the lone coal exchange traded fund surged last year. Domestic coal companies are grappling with slack production.

With U.S. demand for coal in question, producers may be forced to international markets, mainly emerging economies, such as China. Increased steel production could also help U.S. producers of metallurgical coal. Low natural gas prices have previously weighed on coal as U.S. utility providers have turned to cleaner natural gas to power homes and businesses.

Arch Coal Inc., the second-largest U.S. producer by tonnage, said Thursday it was cutting production at its biggest mine, citing weak demand from power plants,” reports Bloomberg. “The company expects output from the Black Thunder mine in Wyoming will be between 62 million and 68 million tons this year, down from 70.5 million tons last year. The low end of that forecast would mark the smallest output since 2000 for the mine that was once the biggest in the U.S., according to the U.S. Mine Safety and Health Administration.”

Political Disappointment for Coal

KOL tracks the MVIS Global Coal Index. That index “is intended to track the overall performance of companies in the global coal industry which includes coal operation (production, mining, and cokeries),transportation of coal, production of coal mining equipment as well as from storage and trade,” according to VanEck.

Related: Inflows to Materials ETFs Rise Amid Trade War Talk

A centerpiece of President Trump’s campaign was reaching out to coal miners, a strategy that helped Trump win nearly all the major coal-producing states with the exception of Illinois. Of course, any politician must make good on promises made to voters or risk being defeated in the next election. The 2020 presidential election is a long way off, but Trump needs to get coal miners back to work. Whether he can is another story.

“As U.S. electricity generators increasingly shift to natural gas and renewable energy, Arch and its rivals are relying more and more on international markets and mining the type of coal used in steel production. That strategy, however, has limitations. Arch released its first-quarter earnings Thursday, posting revenue and net income that fell short of analysts’ expectations,” according to Bloomberg.

For more information on the Materials market, visit our Materials category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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