Pre-Market Analysis on Peabody Energy and Arch Coal: Coal Industry Outlook Improves

  Pre-Market Analysis on Peabody Energy and Arch Coal: Coal Industry Outlook

  PR Newswire

  LONDON, January 18, 2013

LONDON, January 18, 2013 /PRNewswire/ --

After a challenging 2012, the outlook for the coal industry has improved in
2013. Last year turned out to be a tough one for this industry, especially in
the U.S. Our commodities research team has initiated this year's first wave of
technical analysis on two companies in this industry, namely Peabody Energy
Corporation (NYSE: BTU) and Arch Coal Inc. (NYSE: ACI). Download these reports
for free at

A sharp fall in natural gas prices last year hurt the demand for coal from
power generators in the U.S. Concerns over tighter regulations following the
re-election of President Obama, who has been a proponent of clean energy, has
also had a negative impact on the U.S. coal industry. However, the long-term
outlook for the coal industry remains bullish due to expected strong demand
from China and India.

The Chinese economy is starting to show signs of improvement and this augurs
well for the coal industry. Data released earlier today showed that China's
economic growth picked up for the first time in two years in the fourth
quarter of 2012. The world's second largest economy grew 7.9% in the fourth
quarter, according to the National Bureau of Statistics.

Despite the debt crisis, demand for coal in Europe has been strong. In a
recent report, The Economist ^[ ^1 ^] noted that the amount of electricity
generated from coal is rising at annualized rates of as much as 50% in some
European countries.

U.S. coal companies have been capitalizing on rising demand for coal from
Europe and Asia. While exports have helped in offsetting some of the weakness
in the domestic coal market, U.S. coal companies have also been taking steps
to adapt to the changing market dynamics.

In September 2012, Peabody Energy Corp. (NYSE: BTU) announced that it ceased
production at the Air Quality Mine in Vincennes, Indiana and will permanently
shut down the mine due to soft market conditions that make operations
uneconomic. Our technical analysis report on Peabody Energy can be downloaded

Last month, Peabody also provided commentary on its first quarter 2013
outlook. The company said that it expects the first quarter to mark trough
earnings, with results likely to improve as the year progresses. Peabody
Chairman and CEO, Gregory H. Boyce, said last month that while the first
quarter is challenged due to a combination of factors, the company expects
quarter-over-quarter improvement throughout the remainder of the year.

While Peabody expects things to improve in 2013, Arch Coal Inc. (NYSE: ACI) [
Free Research Report on ACI ] ^[ ^2 ^] believes that 2013 will be another
tough year. At the time of release of Arch Coal's third quarter results in
October 2012, the company's Executive Vice President and COO, Paul A. Lang
said that while 2013 is expected to be a difficult year for the coal industry,
Arch Coal's ongoing efforts will allow it to emerge from the cyclical downturn
as a stronger company.

John W. Eaves, President and CEO of Arch Coal, also noted that the company
expects market conditions to remain challenging in 2013. Eaves said that the
company is executing a strategy to successfully navigate the weak market and
the company's plan is focused on improving operational efficiency, optimizing
its asset base and preserving liquidity so it is well positioned to capitalize
as the coal market recovers.


1.Source - The Economist Article - The unwelcome renaissance [
2.Arch Coal Inc. Technical Analysis [ ]

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