Monday, August 3, 2009

Coal Supply Issues Persist

As natural gas battles coal for the hearts and minds of electrical producers, they both face an oversupply issue. There was an interesting article in the Wall Street Journal on Saturday regarding coal surpluses (link should be good for seven days to non-subscribers). Coal's oversupply problem has been noted in recent weeks, but this article gives some additional color, especially in light of the earnings reporting season for publicly traded companies, now underway.

With electricity demand and manufacturing demand down, coal supplies have increased, as has the power of the customer. The article notes that major customers, such as utilities American Electric Power Co. and Southern Co. as well as steelmaker ArcelorMittal, are renegotiating pricing and quantities on contracts.

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