NEW YORK, NY -- (Marketwire) -- 10/16/12 -- Coal stocks surged last Friday on speculation that steel demand was on the rise. Rising rebar prices in China have boosted prices for iron ore and analysts have speculated that metallurgical coal, used to make steel, may also soon be on the rise. Five Star Equities examines the outlook for companies in the Coal Industry and provides equity research on Peabody Energy Corp. (NYSE: BTU) and Arch Coal Inc. (NYSE: ACI).
Coal stocks has benefitted from the current rally in natural gas prices, which gained another 3 percent Thursday, as high prices may see some utilities switch back to coal. Dahlman Rose & Co on Thursday predicted that demand for metallurgical from steel manufacturers in China may be on the rise. The rise in Chinese rebar prices have led to a widening of implied spot steel margins, and have boosted iron ore prices, which have gained approximately 36 from their 2012 lows. According to Dahlman analyst Daniel W. Scott Chinese spot steel margins have jumped more than 30 percent since late July, and he speculated that met coal market could see a move similar to iron ore.
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Peabody Energy is the world's largest private-sector coal company and a global leader in sustainable mining and clean coal solutions. The company serves metallurgical and thermal coal customers in more than 25 countries on six continents. The company is scheduled to release their third quarter 2012 financial results on October 22, 2012.
U.S.-based Arch Coal is a top five global coal producer and marketer, with 157 million tons of coal sold in 2011. Their core business is supplying cleaner-burning, low-sulfur thermal and metallurgical coal to power generators and steel manufacturers on five continents. Shares of the company have surged over 15 percent in the last week.
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