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Arch Coal Inc. Message Board

  • cadmium_telluride cadmium_telluride Feb 22, 2013 1:14 PM Flag

    Coal Is Springed Up For a Huge 2013 Rally!

    Coal Is Springed Up For a Huge 2013 Rally!

    Those of you giving up on coal, you are giving up a huge opportunity you will never see again in your lifetime.

    China imported 290M tons of coal in 2012, versus 182M tons in 2011. Is that a demand slow down?

    China would have imported even more in 2012. But China had one year of excessive flooding, thus 23.2% higher hydro-electricity generation. The extra hydro-electricity in 2012 saved China for 100M worth of coal demand. Now if only 2013 returns to a year of normal rainfall, China would need to import 100M more tons of coal simply to make up the short-fall, BEFORE considering any demand growth.

    The entire global coal trade is only at 800M tons per year volume. The entire US coal production is less than 1 billon tons (1000M tons). Think about that.

    Now on the US natural gas thing, the plummeting drilling rig count will finally show its effects in terms of rapid production decline due to fast decline of shale wells. All exisitng US shale wells collectively as a group, decline at -0.2% per day and losing 50% in a year. Slow down in well drilling means there simply will NOT be enough new wells to supplement the drop of production.

    Natural gas price is going to fly, and so will coal price.

    One more thing to keep in mind is the US shale gas industry has been spending $125B per year to drill shale gas wells in the past few years, but the combined shale gas production so far is only 27 BCF/day, or nearly 10 TCF per year, or at current gas price worth only $33B per year.

    The shale gas industry, facing a looming debt crisis, HAS to CUT spending and save cash to survive! That means they MUST STOP spending money on drilling, whether they like it or not. Continue reckless spending to drill wells means certain death to companies like CHK and others. They know that.

    So expect a huge gas supply drop and a big rally in gas and coal prices. The NG industry needs that huge price rally to survive. Unless they are suicidal and they want to kill each other, the supply crisis will happen.

    Stay in coal. This is where you will make big money. The rally has not come as early as I wanted. But it is comming and it is going to be bigger than I expected.

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    • edgordon Jan 26, 2014 11:03 AM Flag

      FEB 2013.......HOW MANY MORE YEARS ................????????????.!!!!!!!!!!!!!!!!!!!

    • Coal was $5.53 when you made this post. Looks like your PUMP is nothing but a failure just like the coal industry. You know nothing regarding the energy industry just like the rest of these bagholders. Only a fool buys coal. Suckers for punishment.

      Sentiment: Strong Sell

    • Gettig ready for a run on coal soon! It is necessary to flush away the traders and those who are not determined to hold coal.

    • Time has finally come for a big coal rally.

      Sentiment: Strong Buy

    • Give it up far if anyone listened to you they would be included included in the ACI BAGHOLDING CLUB along with you and so many others. FAIL!!!

      Sentiment: Strong Sell

    • One fact that few people noticed:

      China has really reached Peak Coal in 2012!!! That means China has to desperately rely more on imported coal. Here are the numbers:

      China's domestic coal production went up from 3520M tons in 2011 to 3650M tons in 2012.

      China's coal import went up from 182.4M tons in 2011 to 288.5M tons in 2012.

      Combined, China's coal supply went up from 3702M tons to 3939M tons, up +6.4%.

      But China's coal fired electricity generation went up from 3825 billion KWH to 3855 KWH, only up +0.78%.

      That means China's domestic coal, although increased in tonnages, actually contains 5% LESS energy.

      The deteriorating coal quality is a clear indication of Peak Coal. China can keep digging more coal, but they will generate less energy. So China must massively kep increasing import just to keep electricity generation from coal plants flat.

      Very bullish for US coal sector.

      Sentiment: Strong Buy

      • 3 Replies to cadmium_telluride
      • It is about d*mn time for a huge coal rally coming!

        Sentiment: Strong Buy

      • Read the other thread on Peak Coal in China.

        Sentiment: Strong Buy

      • Not only Peak Coal in China, but also Peak Water in China.

        More than 60% of underground water resource in Northern China is so polluted that they are rated as category 5 water, with category 1 being the best and 5 being the worst. Category 5 means that EVEN after best attempt to treat the water, the water is still unsafe to drink. But people there have to drink that water because the ground water source, if any, is much worse.

        Depletion and pollution of underground water resource in Northern China has everything to do with coal mining, they know it. If China wants to survive, it MUST drastically cut domestic coal production and push for more reliance on coal imports.

        China imported 290M tons of coal in 2012 versus 182M tons in 2011. That's a leap. But China will be a much bigger leap in 2013, as 2012 was actually helped by abundant water fall and abundant hydro-electricity, which saved China 100M worth of coal consumption.

        Coal is extremely bullish globally. To put numbers in context, China consumes 4 billion tons of coal a year and US, the No. 2 coal producers in the world, produces only 0.9 billion tons per year. US exported 125M tons of coal in 2012, a record year, but that amount hardly fills 40% of China's coal import needs in 2012.

        The biggest portion of China's coal import came from Indonesia, an island nation with ONLY 0.6% of the world's coal reserves, but some how dared to boast to be the world's LARGEST thermal coal exporter. Clearly Indonesia has no regard to its own future, or the well being of its own people.

        Indonesia can be suicidal but they still can not turn around the fact that their coal reserve is quickly depletion and they can NOT sustain such high level of reckless exports. China has to turn to some one else for coal. China has to turn towards USA the world's 2nd largest coal producer.

        Sentiment: Strong Buy

    • Let's look at what happened in 2012, and why 2013 is a completely different story:

      1. We had an exceptionally warm early 2012 winter, and natural gas companies over-produced. The two combined took away 216,000 GWH worth of coal generated electricity which was shifted to natural gas. That was equivalent to 116M tons less coal demand for 2012. Coal generation was 1517,000 GWH and natural gas generation was 1231,000 GWH.

      2. But the increase in natural gas generated electricity is once again fading. In April 2012, electricity generation from coal and NG were almost equal. By Dec. 2012 coal generation was 134230 GWH versus 84103 GWH from natural gas. So coal beats NG by a +60% margin.

      3. At the Dec. 2012 coal to NG ratio in terms of electricity generation, assuming total electricity generation remains the same, I expect the 2013 electricity generation from coal to be at 1690,000 GWH level, or an increase of 173,000 GWH for coal, or worth 93M tons of coal.

      4. US coal export in 2012 reached 125M tons, a historic record, and an increase of 18M tons.

      5. US coal demand lost 116M tons in 2012 but export gained 18M tons, combined the total loss of demand was 98M tons. But the US coal industry has curtailed 80M tons of coal production. The curtailment still continues at roughly 10% level.

      The coal sector is set up for a huge rebound in 2013. Stick to coal.

      Sentiment: Strong Buy

      • 2 Replies to cadmium_telluride
      • I totally agree with you. But some people want to be 'Saver of Earth' by adding carbon tax which badly hurt peoples sentiment in coal since the beginning of Feb. Stupid, if we have colder winte in a row of two or three, I am sure we will see media headlines filled with 'ICE AGE'.

        Sentiment: Hold

      • Let me clarify more. The combined coal + natural gas electricity generation in one year is 2750,000 GWH per year. Coal and natural gas each gets their slice depending on coal versus natural gas preference ratio.

        In december 2012, the coal to NG generation ratio has recovered to 160% to 100%. So coal will take 160/260 of the slice of the pie in 2013, which is 1692,000 GWH coal generated electricity.

        Now let's look at the supply side. US coal production is currently at 19M tons/week level. The US coal export was 125M tons in 52 weeks in 2012. That's 2.4M tons/week exports. Subtracting exports, the US domestic supply of coal is 16.6M tons/week.

        92.5% of US domestic coal supply is used to generate electricity. So that's 15.355M tons per week available to the power sector. Each thousand tons of coal generates 1.840 GWH of electricity. So for the whole year, available coal can generate 15,355 * 52 * 1.84 = 1469,166 GWH of electricity.

        This is far short of the 1692 GWH coal electricity demand expected in 2013. This is even shorter than the actual 1517,000 GWH of coal electricity demand in 2012. So as long as producers continue current production curtailment, even if demand remain at 2012 level, coal is still in short supply. But a lot of coal to natural gas switch will switch back to coal, as shown in Dec 2012 data.

        Coal is extremely bullish in 2013.

        Sentiment: Strong Buy

    • cadmium_tellsuBull, You were told to stay off of this board.
      You post this bull on so many boards, many that have nothing to do with energy.
      Take your old coal pumping and Nat Gas trashing spam somewhere else!


      Sentiment: Buy

    • If your thesis is true.....why are no coal companies making any money? Why cant they see this "spring" coming like you do?

      • 2 Replies to bill_billingsly
      • Bill, if you give up here, you give up here. I can't help you. Those who believe in coal, believe in coal. Those who don't, don't. I am sticking to coal and I am holding patiently.

        Sentiment: Strong Buy

      • A sector super rally is one that goes from under profitability to well above profitability. ACI would have been at $100 today if it is making lots of profit already. The whole point of riding a rally up is buy when the company is losing money and when no one else buys, and foreseeing that the sector turns around and the company starts to make a lot of profit soon, and people flock in afterwards.

        Same story happened in the 2007-2008 big coal rally. Coal price went from $30-ish per ton to $147 per ton in just 10 months. Was coal company making any profit at $30/ton? Of course not. Did they make a lot of profit at coal price of $147/ton, of course they did! The change happened in just 10 month at the time.

        Today we have so many more positive things lined up for a big coal rally than 2007-2008. The coming coal rally will be much bigger than the last one, which brought JRCC from $3.56 to $62.86 in 10 months. This time we are talking about JRCC going from the low of $1.89 to the high of $100, and in less than 20 months!!!

        If you miss this one, shale on you! I am telling you now,
        and I will be saying I told you a year from now.

        Sentiment: Strong Buy

    • edgordon Feb 23, 2013 1:20 PM Flag

      Truth is you have been postulating the coal supercycle for quite some time. I hope you are right and I am not decrying your view BUT everytime it looks like there may be some light at the end of the tunnel its a gorilla with a flashlight and we get hammered. Between ACI ANR AND JRCC I have 100k shares and deep underwater and wonder just how much lower can this go before the elemental forces come together and coal takes off BIG TIME. Truth is it might never happen and for my part I have decided to give it until 2014. Maybe I am foolish and should just cut my losses and get out but it is truly sickening to see the markets all up big time in the last year and coal in the crapper. Be well and GLTA longs.

      Sentiment: Hold

      • 1 Reply to edgordon
      • Have you studied history a see a long period where the entire coal sector remain low for longer than one year? No such historic precedence existed. Coal is poised to rally big time soon. If you don't believe it, fine. Just walk away and let other people make the profit.

        I see it as a once in a lifetime opportunity. There has not been another time when the market fundamental is soo bullish: China consumes 4 billion tons of coal per year and inimprted 290M tons in 2012 versus 182M tons in 2011. But yet the entire market got the coal completely wrong and preceived that retiring into history. You can not find an opportunity when 99% people betted on the wrong side and you know you are with the 1% who will ultimately be proven wrong.

        That is called opportunity. If 99% of people go with you it will not be an opportunity.

        Sentiment: Strong Buy

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