The Coal Industry Does the "Tighten Up"
The balance of supply and demand has always created a very cyclical behavior for commodities, and coal is no exception. As natural gas has emerged as a more formidable competitor for the utility sector, coal manufacturers have found themselves oversupplying the market. To counteract this oversupply, coal companies have been slowing production growth in order to tighten up the market.
It appears that these methods are starting to pay off. Even though deliveries of coal are still down compared to last year, consumption has climbed as utilities have been burning through their stockpiles. Fortunately for the industry, several players have slowed production enough that prices for coal could rebound as shipments pick up again. Tune into the video below to find out what companies have been easing off production in hopes of brighter days ahead, and find out how long we can expect this next bump in coal to last.
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The article The Coal Industry Does the "Tighten Up" originally appeared on Fool.com.
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