Will Coal Make a Comeback in 2014?

From The Montley Fool

By Lior Cohen

The U.S coal industry slowed down in 2013, bringing pain to producers and investors alike. Despite this slowdown, several coal companies, including CONSOL Energy (NYSE: CNX  ) and Alliance Resource Partners (NASDAQ: ARLP  ) , were able to increase their sales, while others, such as Peabody Energy  (NYSE: BTU  ) , didn’t fare as well. Will the coal industry finally heat up in 2014? Will coal companies improve their performance? Let’s examine these issues.

2014 outlook
According to the Energy Information Administration, coal production declined by 1.5% during 2013. Despite the moderate drop in production during last year, the EIA estimates coal production will increase by 3.6% in 2014. The rise in production is mainly due to an expected increase in consumption and stable inventories. Moreover, the International Energy Agency projects the coal industry to grow, on average, by an annual rate of 2.3% through 2018. These factors suggest that coal companies should show an increase in sales in 2014.

Coal producers’ outlook for 2014
During the first nine months of 2013, the coal producer Alliance Resource Partners increased its production by 15% year over year. In 2014, the company expects an increase in production mainly due to a rise in production at its Tunnel Ridge mine; several mines are expected to start producing later this year, including Gibson South mine and White Oak mine.

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