Rail Group News has coal up 18.7% for the week ending March 4. I believe it's not the first week of gain the year. Is it just refilling the stock pile?
The primary domestic market for coal is electric power generation. The demand for coal took a hit when natural gas prices hit a low in the last few years, where prices were limited by the domestic market. Now that LNG is being exported, natural gas prices are up compared to a couple of years ago and coal is now becoming more economic again.
Also helps that the current admistration is less hostile to coal than the previous administration.
It's slowly coming back, but the question is how long will it last?
When coal disappears for good, there will still be autoracks, intermodal transport, iron ore, and general freight traffic to keep those profits rolling in.
ATSFGuy It's slowly coming back, but the question is how long will it last? When coal disappears for good, there will still be autoracks, intermodal transport, iron ore, and general freight traffic to keep those profits rolling in.
A one week or one month or one year trend is not indicative of the long term run for coal or any other commodity.
Coal as a boiler fuel for electric generation is on an accelerating downhill slide. Although the slope of the curve will vary from time to time and, on occasion may even reverse direction, the outcome is inevitable. The use of coal for electric generation in the western world will evenutally become a thing of the past.
Rio Grande Valley, CFI,CFII
This upward blip in coal traffic is the "dead-cat bounce" someone mentioned a while back.
It will be interesting to see what effect the Allam Cycle has on future natural gas plants. Coal plants can also theoretically utilize this process but that will probably be a long time coming because their is so much natural gas out there and natural gas plants are so much less expensive to construct.
https://www.forbes.com/sites/christopherhelman/2017/02/21/revolutionary-power-plant-captures-all-its-carbon-emissions-at-no-extra-cost/#24f20549402d
The market for export coal is shrinking, too. China is a major player in the export coal trade and Australia is on the verge of opening some large mines in Queensland to increase their share of the business.
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