Because of cheap natural gas production, coal has struggled recently to attract the business of its biggest client base: utilities. Thankfully for coal, natural gas prices have risen from their 2012 lows, but not all basins regained competitiveness. Appalachian producers remain maligned based on the continued weakness of the metallurgical coal market and the high cost of production for thermal coal.
That leaves the Powder River Basin and the Illinois Basin left to duke it out. Both have their own advantages. The PRB is the cheapest region in which to produce and generally provides the cleanest-burning thermal coal. To counter this, the Illinois is located closer to the majority of coal-burning utilities. Many producing companies have separated themselves from the pack based on geographic production and proximity to end users.
While the industry might be suffering at the moment, there are companies that might be worth a look. For a bit more perspective from our analysts, tune in to the video below.
Joel South has no position in any stocks mentioned. Taylor Muckerman owns shares of CONSOL Energy. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.