CHICAGO, April 24, 2012 /PRNewswire/ -- Today, Zacks Equity Research discusses the Coal Industry, including Peabody Energy Corporation (NYSE: BTU), CONSOL Energy Inc. (NYSE: CNX), Penn Virginia Resource Partners L.P. (NYSE: PVR), Natural Resource Partners L.P. (NYSE: NRP) and Alliance Resources Partners L.P. (Nasdaq: ARLP).
Demand Upsurge in Asian Countries: The increase in coal demand in Asian economies like China and India has been a key price driver since the end of the recession in 2009. We expect this trend to continue in future mainly due to the growing energy needs in India, China and South Korea.
Of the Asian countries, economic growth in China and India will be the fastest. These two countries do produce coal, but its domestic coal production has yet to match the growing demand, resulting in the continuous need of importing coal. These countries rely heavily on coal for electricity generation.
A major portion of the new electricity generation units, which are expected to come up in these two countries, will utilize coal as a source of fuel. As per The Economic Times, it is projected that coal imports will touch 1 billion tons in China in 2030 from the present level of 175 million tons in 2011. Indian imports for coal are expected to reach 400 million tons in 2030, up from 80 million tons in 2011.
Given the growing demand from the fast-growing Asian economies, companies find it attractive to export coal to the emerging regions. Some of the names making the most from overseas coal exports are Peabody Energy Corporation (NYSE: BTU) and CONSOL Energy Inc. (NYSE: CNX). To cater to the increasing demand of coal in Asian countries, Peabody has acquired Macarthur Coal in Australia and expanded its footprint in high-demand regions.
Elsewhere, certain coal master limited partnerships (MLP), including Penn Virginia Resource Partners L.P. (NYSE: PVR), Natural Resource Partners L.P. (NYSE: NRP) and Alliance Resources Partners L.P. (Nasdaq: ARLP), are also good investment bets for people seeking exposure in the coal sector.
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