28 Aug, 2008
Coal Facts
Here are paragraphs you might want to read, even if you'd never buy the stock of a coal company:
A new coal fuel generation is being developed in scores of nations
around the world; all of this leading to a 7% compound growth rate in
seaborne coal demand. On the supply side, major coal exporters are
straining to keep up against the sustained demand growth. All aspects
of the coal chain are under pressure and more nations than ever are
seeing the valuable resource that their coal represents, forcing coal
suppliers to keep greater amounts of coal at home.
(and later)
In summary, we are seeing record coal prices, sustained growth in coal demand and an improving competitive advantage for coal over other fuels.
(and later)
In summary, we are seeing record coal prices, sustained growth in coal demand and an improving competitive advantage for coal over other fuels.
EleBlog take: Didn't you think (from all of the "green" this, global-warming that, and alternative-energy "stuff" out there, that coal-fired electrical power generation was going down? WRONG!!!
Shifting now to Australia; as I mentioned earlier, Peabody's volumes
expanded 15% above last year and 12% year-to-date. This is well above
the overall industry, where volumes were up just 2% year-to-date.
Looking at Australia's prices, we realized $95 per short ton, versus
the mid-to-low 50s last quarter and last year. This reflects the higher
levels, we've secured for new met and thermal exports that began April
1st. We expect further improvement in price realizations going forward,
as lower priced carryover volumes were largely shipped in the second
quarter. Our cost in Australia ultimately reflected higher commodity
prices, currency movements and the remaining effects of first quarter
outlook. In total, the Australian margin exceeded $43 per ton for the
quarter.
EleBlog take: Now, every company ALWAYS puts its best foot forward. But if I read that correctly:
a. In the previous quarter, PRICES were "mid-to-low $50" per short ton.
b. In the most recent quarter, "the Australian margin exceeded $43 per ton."
c. It appears that Peabody (stock symbol BTU) is now realizing a gross profit in the most recent quarter (in Australia) that's 80% of the gross sales price of 90 days earlier.
b. In the most recent quarter, "the Australian margin exceeded $43 per ton."
c. It appears that Peabody (stock symbol BTU) is now realizing a gross profit in the most recent quarter (in Australia) that's 80% of the gross sales price of 90 days earlier.
No one (not even the Peabody people) can tell you if demand for coal will be sustained. But it seems like a good bet.
- - - - -
JUST A BIT MORE
By the way, this company sells both "thermal" coal (for generating heat in power plants) and "met" coal (metallurgical coal -- also called "coking" coal -- used in manufacture of iron and steel).
If you're interested, here are a couple of paragraphs from the conf call on "met" coal:
To begin with, the current market conditions are providing great
opportunities for seaborne coal suppliers such as Peabody. And we have
the greatest leverage of the any of the U.S-based companies with over
half of our EBITDA expected to come from our international sales
platform. In our last call, we were just settling met coal agreements
for the contract year that begins in April. I am pleased that the
settlements came in at the expected $300 per metric ton benchmark level
for the highest quality coking coal . . .
And we are seeing met coal sales right now on the spot markets that are fetching $300 plus per ton. This bodes extremely well for the next contracting season. As you'll recall, when went into '08, we had significant excellent legacy contracts that we expected to roll off in '09, which will hopefully double our unpriced position in 2009 from what we had at the beginning of 2008. This has very favorable implications for Peabody.
I don't know if Peabody is a "screaming buy." But coal sure seems to be, and this company seems to have its arms around the trend. As my investment guru, Bill Fleckenstein, says -- the difference between a great company and a great investment is The Price (at which you can buy in).I'm planning to do more thinking and watching on BTU -- and if you are looking for an energy investment that's NOT oil, so should you!
(More)
26 Aug, 2008
'CBECS Says You Are A Dummy'
26 Aug, 2008
Ugly Nonresidential Forecast
It's just as fugly.
(More)
26 Aug, 2008
Cabling Quiz
The exact meaning of “certification” and
“verification” are carefully defined in all industry standards for
structured cabling.
True or false?
True or false?
False: These terms are used by test equipment manufacturers to describe how their devices conduct tests, but the terms themselves are not used in the standards.
26 Aug, 2008
Technology For Elder Care
"The smart home will help the elderly maintain a safe, healthy, and independent life," said Harry Wang, Director, Health & Mobile Product Research (at Parks). "Although the user population will be small initially, more people will adopt these new technologies in embracing the broader emerging eldercare model that promises a high quality of service, individual dignity, and the intelligence to monitor situations and act before they become critical." Adoption and revenue growth will be even greater than forecast if the Center for Medicare and Medicaid Services (CMS) embraces this model, Wang emphasized.
26 Aug, 2008
Green Magazine Issue
Well, to heck with that -- there's a lot of good information in the thing. You can go here and download PDFs of various articles.
My favorite article, of all that I wrote and assigned for that issue: The "Green Primer," available in a 9-page PDF downloadable here.
18 Aug, 2008
Whitepaper On Green
DISCLAIMER: One of my "gigs" as a freelance editor is as editor/coordinator of the EDLs. There are three a year. Yes, that means I work for NECA on this project. My boss on the job is Rob Colgan, director of marketing.
