Coal stocks have frequently made large daily percentage moves in the past few months, in part because many of the stocks are so beaten down. When your shares are worth $1.25, a 10-cent move is worth 8% of your market cap. Today, coal stocks jumped following comments from Peabody Energy (BTU) CEO Gregory Boyce claiming that demand in China has been on the upswing in recent months.
“We project they will reach a record 285 million tons in 2012 as the country increasingly looks to the seaborne coal markets,” Boyce said at an investor conference, according to the Associated Press. “We expect global metallurgical coal use to increase 25 percent by 2016, translating to an additional 250 million tons of demand growth, with the bulk of increases led by China and India.”
The global growth should offset a decline in coal use in the U.S. as some power plants switch to natural gas, Boyce said.
Peabody jumped 5.5% on the news. Alpha Natural Resources (ANR) rose 6%, Arch Coal (ACI) was up 8.7% and Patriot Coal (PCX) rose 18%.
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