Coal stocks have generally performed very well in the last six months. This is no surprise, as global coal prices, both thermal and metallurgical, are reaching multiyear highs. We think this momentum will continue in the coming year.
The coal industry has benefited from two relatively unlikely events in the last few months. First, in late 2010, torrential flooding in Australia severely disrupted metallurgical coal shipments out of Queensland. As Australia is a linchpin of the global coal trade, this sent Asian coal prices soaring to levels unseen since 2008. Metallurgical coal prices in particular jumped perhaps 40% to over $300 per ton.
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Michael Tian does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.