Coal Sector: Stock Market Update for Week Ended July 17
Coal Prices Drop in Spite of Favorable Indicators
Walter Energy files for bankruptcy
On Wednesday, July 15, Walter Energy (WLT) filed for bankruptcy. The “pure-play met coal producer” ran out of options when it couldn’t make an interest payment by the end of the grace period. The control of the company will now pass on to senior creditors. For more details, read the Market Realist series Walter Energy Files for Bankruptcy: What Investors Should Know.
Trading on ANR halted
On Thursday, July 16, the New York Stock Exchange suspended trading on Alpha Natural Resources (ANR) shares due to continued “abnormally low prices.” The stock traded below a dollar for more than ten weeks before closing at $0.24 on July 15, the last day it traded. News reports also suggested that ANR may file for bankruptcy as early as next month.
Top losers
The SPDR S&P 500 ETF (SPY), a representative of the broader market, rose 2% last week. However, the Market Vectors Coal ETF (KOL) fell 2.4% as Walter Energy filed for bankruptcy and reports of natural gas surpassing coal’s market share in electricity generation made the rounds.
Peabody Energy (BTU) was the biggest loser with a 19.4% fall. The stock ended at $1.29 on Friday, July 17.
Consol Energy (CNX) fell 12.4% to $17.21 with a market capitalization of $3.9 billion. Weaker fuel prices have taken a toll on the company’s stock. Last week, the company announced the layoff of 10% of its workforce.
Natural Resources Partners (NRP), a coal MLP, fell 11.7%, while Cloud Peak Energy (CLD) fell 9.4%.
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