This Coal Company Is in the Right Place at the Wrong Time

The coal market in the United States has been in a severe bust cycle since the beginning of 2011, with most major companies' share prices down over 50% in that time frame. Many factors have been weighing on the sector, including record low natural gas prices, weakening demand from domestic utilities, and slow downs around the world in steel production. 

With all of these struggles, Arch Coal (NYSE: ACI  ) has been able to position itself nicely for a rebound, both here and abroad. As the No. 2 coal producer in the U.S., Arch Coal slowly has been able to reduce its cost per ton in all operating regions. It has also signed export deals that will help move its coal offshore to places where demand is expected to pick up. Arch Coal has production capacity waiting in the wings that can be pulled online with limited capital spending to handle global demand and the hoped-for resurgence in the U.S.

To see how this company has been accomplishing this, check out the discussion about this company's current situation and its outlook for the future in video below.

The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois Basins to India, China. and the Europe. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don't miss out on this invaluable resource -- simply click here now to claim your copy today.


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  • Report this Comment On December 11, 2012, at 2:12 PM, Paulson545 wrote:

    T Boone Pickens probably agrees with this bullish report because he recently opened a position in Arch Coal.

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