Largest U.S. Coal Miner Sees 17% Share Price Surge

The surge in worldwide energy prices has triggered a spike in coal usage—which has in turn improved the bottom line of the largest coal miner in the United States.

Third-quarter sales for coal miner Peabody Energy Corp. shot up to the highest level in seven quarters, to $900 million.

Peabody’s share prices surged 17% on Monday—the largest spike since July, according to Bloomberg.

Other U.S. coal miners are likely to see boosts in revenue and sales, as the boost in coal demand pairs with higher prices for the commodity, although green initiatives and the shift away from coal is expected to dampen how quickly and how extensively coal miners can lift production in response to demand.

Coal demand is soaring in other places as well, with China seeing a shortage of domestic coal. There, thermal coal futures have hit a record high, as China’s September coal output fell.

In India, coal’s share in the electricity generation mix increased to 70% during the first half of October, up from 66.5% in September. Power plans have enough coal inventory to last just four days—compared to 12 days two months ago.

U.S. coal-fired electricity generation is expected to increase this year for the first time since 2014, after years of decline, according to information published by the Energy Information Administration.

The EIA now sees 22% more U.S. coal-fired generation in 2021 than in 2020. While this is true, the EIA does not expect this trend to continue, in part due to the U.S. power sector retiring 30% of its capacity at coal plants since 2010 and no new coal capacity brought online in the U.S. since 2013.

The EIA sees coal-fired generation declining next year by 5% as more retirements continue.

ByJulianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

• Refining Billionaire: $100 Oil Is Likely
  
• OPEC+ Under Produces Quota Despite Calls For More Oil
  
• Peak Meat, EVs, and Solar: The World in 2030