• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Russia Says Europe Will Struggle To Replace Its Oil Products
  • 58 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 16 hours Reality catching up with EV forecasts
  • 8 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 2 days 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 7 days A Somewhat Realistic View of the Near Future for Electric Vehicles Worldwide
  • 13 days The Federal Reserve and Money...Aspects which are not widely known
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Good News Keeps Coming for This Dismissed Sector

Great investment opportunities require two things.

Firstly, great fundamentals. And secondly, a perception that is significantly disconnected from the rosy reality.

The coal market today shows both of these factors--with a considerable gap in between. General sentiment towards thermal coal producers today is awful. There's a sense that the global electrical sector has moved on from coal. Causing a fall in demand, while at the same time output surges from major producers like Indonesia and Australia.

And yet good news just keeps coming up when it comes to the fundamentals for the thermal coal sector.

ADVERTISEMENT

We saw another such point this week from the Japanese Federation of Electric Power Companies.

The industry group announced that thermal coal consumption by Japan's power sector hit a record in October. Jumping 25.8% from October 2012, up to 4.78 million tonnes on the month.

The move represents a decided switch to coal for the Japanese power sector. An industry that is trying to reduce use of expensive crude and fuel oil. With consumption of those fuels in October falling 16.3% year-on-year.

ADVERTISEMENT

Growing Japanese coal demand is an unexpected boost for the market. China and India have been seen as the main drivers for import growth recently, with Japanese demand thought of as significant but relatively level.

Add Japan's burgeoning coal demand to Indian imports that are set to jump 50% this year, and the picture for thermal coal starts to look much different from prevailing opinion.

Especially in light of recent mine closures and project suspensions in producing nations like Australia.

When good news keeps piling up while investors insist on being bearish, it usually means good things ahead for a sector. Coal today is one of the best fits we've seen in a long while, on both of these counts.

Here's to keeping your eyes open,

Dave Forest


Download The Free Oilprice App Today

Back to homepage


ADVERTISEMENT


ADVERTISEMENT



Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News