Browse > Home / Markets, Stocks, Strategy / China is Ramping Up Coal Reserves – Consol Energy (CNX) to Benefit

China is Ramping Up Coal Reserves – Consol Energy (CNX) to Benefit

November 16, 2009

There has been a few items that we have seen lately regarding China’s desire to build their commodity stockpiles and now they are reportedly looking to create strategic coal reserve. Our position in Consol Energy (CNX) could do well as they have been discussing their China relationship for some time.

Realize that this position is vulnerable to the variations of the dollar as it is within the commodity sector. It has a high level of volatility, but good general fundamentals. (Sales have been soft of late as would be expected) We will hold this position unless it breaks support as this news is a good catalyst. Of course market volatility will create exaggerated moves as the beta of this name is high. Also, any major moves for the dollar (higher) should be negative for Consol in the near term.

cnx_nov2009

Bloomberg - U.S. coal producers in the Appalachian region are shipping met coal directly to China as demand from steel mills there rises, the Wall Street Journal said, citing producers. Consol Energy Inc. said it’s shipping met coal, a key part of steel production, directly to China for the first time in five years, predicting it will send 400,000 tons in the second half of 2009, and Patriot Coal Corp. said it plans to send hundreds of thousands of tons of coal there next year; Walter Energy Inc. said it hadn’t yet exported any coal to China but had received inquiries about long-term supply from both Chinese and Japanese companies, the newspaper said.

MarketWatch — China plans to create a strategic coal reserve amid a spike in imports of the fuel, as the country continues heavily investing in infrastructure and industrial output, according to a news report Friday.
Is China Ready to Be a Major Global Player?

WSJ’s Jason Dean speaks to professor Huang Yasheng from the MIT Sloan School of Management about whether China is ready for a global leadership role.

China may create the reserve as early as next year, as imports are on pace to surpass exports for the first time ever on an annual basis, Japan’s Nikkei business daily reported.

Coal provides 70% of China’s energy, and state-run mining giant China Shenhua Energy Co.has been ordered to build a network of 10 reserve sites capable of holding a total of between 100 million and 200 million tons of coal, the report said.

China aims to keep the equivalent of about 10% of domestic consumption in reserve, it said

___

Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.

Related Posts:

  1. China is BUYING Coal – Patriot Coal (PCX)and Consol (CNX) Benefit We have been talking about the latest move by China to add...
  2. Consol Energy (CNX) – Buy Signals and China Connection We have liked Consol Energy (CNX) as a trading position for some...
  3. Coal Companies Rally – Patriot Coal (PCX) and Consol Energy (CNX) A couple of weeks ago, there was some good news for coal...
  4. Patriot Coal (PCX) – Takeover Rumors Moving Stock Patriot Coal (PCX) is ramping higher again today as the rumors are...
  5. Hot Coal Companies in A Cold Winter (PCX) (CNX) (BTU) Volatile yes, but the companies in the coal industry have a great...

Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.

Written by Andrew Horowitz · Filed Under Markets, Stocks, Strategy 

Comments

This website uses IntenseDebate comments, but they are not currently loaded because either your browser doesn't support JavaScript, or they didn't load fast enough.

8 Responses to “China is Ramping Up Coal Reserves – Consol Energy (CNX) to Benefit”

  1. China is Ramping Up Coal Reserves – Consol Energy (CNX) to Benefit … | China Today on November 16th, 2009 4:37 pm

    [...] Read the original: China is Ramping Up Coal Reserves – Consol Energy (CNX) to Benefit … [...]

  2. Consol Energy (CNX) – Buy Signals and China Connection : The Disciplined Investor on December 9th, 2009 9:16 am

    [...] had recently highlighted the news that China is ramping up their coal buying to bring up their stockpiles and Consol was one of the companies that may [...]

  3. Consol Energy’s Buy Signals and China Opportunity | Reaction Radio on December 9th, 2009 2:34 pm

    [...] had recently highlighted the news that China is ramping up their coal buying to bring up their stockpiles and Consol was one of the companies that may [...]

  4. Consol Energy’s Buy Signals and China Opportunity | Stocks and Sectors on December 9th, 2009 5:02 pm

    [...] had recently highlighted the news that China is ramping up their coal buying to bring up their stockpiles and Consol was one of the companies that may [...]

  5. Seeking Alpha on December 10th, 2009 10:35 am

    Consol Energy’s Buy Signals and China Opportunity…

    Andrew Horowitz submits: We have liked Consol Energy ( CNX ) as a trading position for some time. Sure…

  6. Transcripts on December 10th, 2009 10:39 am

    Consol Energy’s Buy Signals and China Opportunity…

    Andrew Horowitz submits: We have liked Consol Energy ( CNX ) as a trading position for some time. Sure…

  7. Rex Tillerson on December 10th, 2009 10:41 am

    Consol Energy’s Buy Signals and China Opportunity…

    Andrew Horowitz submits: We have liked Consol Energy ( CNX ) as a trading position for some time. Sure…

  8. Market and Economy on February 25th, 2010 11:18 am

    Brand New Energy Source – Bloom Energy (Believe it or Not?)…

    The Holy Grail it is called. A brand new form of energy efficiency made from common beach sand. Of course…

Got something to say?