Foreign Demand for Coal Grows on Increased Imports From China and the United Kingdom
NEW YORK, NY -- (Marketwire) -- 03/15/13 -- The U.S. coal industry has endured some major struggles over the past few years. Tighter regulations on emission and increased competition from cheap natural gas have been major factors in the coal Industry's sharp decline. The Market Vectors-Coal ETF (KOL) has fallen over 30 percent in the past year. Research Driven Investing examines investing opportunities in the Coal Industry and provides equity research on Arch Coal Inc. (NYSE: ACI) and James River Coal Company (NASDAQ: JRCC).
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While domestic demand for coal has dwindled, foreign demand for coal looks to be on the rise. In 2012, China was the largest importer of coal with a total of 290 million tons, a year-over-year increase of 59 percent. Through the first two months of 2013 China imported 53.85 million tons of coal, an increase of 34.3 percent when compared to a year ago, according to customs data.
"The market demand this year is expected to rise as the economy improves and major coal consuming industries such as power generation and metallurgy recover," said Guan Dali, a coal market analyst with market intelligence firm chem365.net.
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The United Kingdom is set to become more dependent on foreign coal after two major coal producers, UK Coal and Scottish Coal, announced mine closures earlier this month. According to a recent Reuters article, traders have stated coal imports are likely to see an increase of 70 percent due to the closures.
"Coal still consistently provides between 40 per cent and 50 per cent of the U.K.'s electricity needs and demand remains high. However, Scottish-mined coal is priced in relation to global pricing trends which have been at record low levels," Scottish Coal said.
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