NEW YORK, NY--(Marketwire -02/09/12)- Shares of companies in the coal industry have lagged the market in 2012. Several miners are expected to reduce production further this year as demand falls in the U.S. and Europe, Dahlman Rose analyst Daniel Scott explained in a recent research note to investors. Scott said the production cuts are "necessary given current conditions." The Paragon Report examines the outlook for companies in the coal industry and provides equity research on James River Coal Company (NASDAQ: JRCC - News) and Walter Energy Inc. (NYSE: WLT - News) (TSX: WLT - News). Access to the full company reports can be found at:
Analysts such as Dahlman's Daniel Scott argue that Europe will need less U.S. coal as its economy struggles through a deep financial crisis. Meanwhile, with natural gas prices near ten year lows, North American Utilities companies are expected to rely more on abundant natural gas.
Citigroup analyst Anthony Yuen argues that natural gas prices could resume falling, spurring even more utilities to switch from coal to gas for power generation. Yuen said several factors could keep pushing gas prices down, including strong production and mild winter weather.
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Walter Energy, Inc. produces and exports metallurgical coal for the steel industry primarily in the United States. The company also produces steam coal, coal bed methane gas, metallurgical coke, and other related products. In January, a shareholder sued the Walter Energy and three executives, claiming they inflated the company's stock price by overstating the company's earnings prospects last year.
James River Coal Company, through its subsidiaries, engages in mining, processing, and selling bituminous, steam, and industrial grade coal in eastern Kentucky and in southern Indiana.
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