The coal rout continues
The coal sector continued to feel the heat, with the VanEck Vectors Coal ETF (KOL) falling 2.9% to $11.53 during the week ending June 26. Subdued natural gas prices, and the expectation of moderate weather in the East and Northeast, played havoc for coal producers operating in the regions.
Moreover, there were company-specific factors that played a role in pulling stocks down. Also, macro factors such as the heightened possibility of a Grexit also contributed to the overall stock market’s movement. The SPDR S&P 500 ETF (SPY) fell 0.5% during the same week.
Alpha Natural Resources (ANR), the second biggest coal producer in the US, fell 18.6% to 32 cents, with a market capitalization of $71.4 million. The stock has lost more than 80% of its value since the beginning of 2015 as the possibility of default increases, along with continued weakness in coal prices.
Arch Coal (ACI) fell 14.5% to end the week at 40 cents, with a market capitalization of $85.5 million. Peabody Energy (BTU), the largest American coal producer, lost 12.9% to $2.29, with a market capitalization of $636.1 million. Moody’s (MCO) downgraded BTU last week to B3 from B2. Moody’s also cut the outlook for Peabody Energy as the weak industry environment persists.
Consol Energy (CNX) fell 4.7% to $22.39, with a market capitalization of $5.1 billion. The company lowered the price and size for the proposed IPO of its master limited partnership (or MLP) CNX Coal Partners LP, valuing the MLP at $355 million, lower than the previous estimates.
Cloud Peak Energy survives
Only Cloud Peak Energy (CLD) gained among coal stocks, rising 3.9% and closing at $4.82, with a market capitalization of $294.2 million.