Article in Financial Times today about how Japanese utilities are in a stand-off over the purchase of coal for the year beginning April 1st. First time they have not reached an agreement long before the deadline. Also prices are down substantially from that provided in the past.
Steel trouble aren't helping either.
Guess it is a perfect storm but I suppose it can get worse before it gets better. Hard to work off excess capacity in a high fixed cost business.
Couple of reasons, current senate bill with carbon taxes in it...fear of what might be. Will not pass does not have enough senate votes. China and india are major consumers and their economies are stalling pushing down demand. Full impact of plants moving over to natural gas is taking effect. Most importantly, there is a new secretary of energy that begins Senate confirmation on April 9th. What you are seeing are institutional owners moving out of ACI to protect against the what if. They can always buy back in but the risk is just too much. The individual investor is just along for the ride. I expect some major news in the next 2 weeks right before earnings, that big news will be either a contract with China coal company or china private equity. Why would they do this? Because ACI is such a deal they need to buy up future supply sources and what better way to do it when the American public is on an AntiCoal push. Expect big news soon, executives do not go to China just for vacation, they work deals. Perfect example of this is KWK who sold 25% of their shale land to Tokyo Gas, expect to see more and more of this in the next few quarters, over supply of cash in the foreign markets will snag up cheap american fuel sources. At these levels you will see institutions move back in along with foreign money next week. Aci will ralley after Moniz is confirmed and china announcement comes out week of April 15th.