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  • doctor_halo doctor_halo Mar 10, 2008 4:54 PM Flag

    Coal prices going stratospheric in China

    Add this to the list of bearish sentiments against SDTH:

    Does anyone know if SDTH is using coking coal or thermal coal? $300/ton for coal will kill this stock. It'll be deader than a doornail. You'd think with a recession energy consumption would go down or at least level out a bit.

    I was seriously contemplating jumping in when SDTH tested the $8.50 support level again, but I keep staring at that four week chart and all I just see is continuous and steady selling from the funds. The only upside I can see is that the volume during the last week been low, so perhaps we're finally at a level where we're considered a "hold" again. It would be nice to see some upside on strong volume again.

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    • Buy CHNR they just got into the cjina coal biz

    • Understand the concern, but the price action lower has also hit all coal stocks, so I wouldn't attribute the stock slides to the coal concern.

      It would be a good exersize to find out how much coal or coke is used to convert the SDTH limestone. You might find that the tonage ratio may not be that material to operating margins.

    • The SDTH chart is a train wreck. No sense buying any significant number of shares until there is a reversal. Next strong support level is $8.47 from a technical perspective. If we break $8.47 then next support is under $8.

      Speculators are currently driving up oil, gold and coal prices. $107.85 for a barrel of oil today and I heard one analyst calling for $150 a barrel before the end of the year. Since equities are tanking more speculative money is jumping on the oil train driving the price even higher since that is where you can make money right now.

      There is an abundance of coal worldwide so no one can really have a monopoly. China has a lot of coal supply but they will need to get more mines online. They have stopped exporting coal but they will get hammered as long as they have to import and will be victim to inflated coal prices. It will take time to get more mines online.

      So not sure what the current impact is to SDTH and if they can even pass through any costs at this point for this spike in coal pricing. Long-term hopefully China gets more mines online so they don't have to import coal.

      Long-term SDTH looks good along with other stocks I'm tracking but short-term absolutely no sense putting any serious money to work in this market right now.

      I'm just wondering when the next bear rally is going to show up. The $VIX is close to 30 and it would be great to be in the middle of a bear rally when SDTH announces.