Most investors are aware that China’s surging growth and increasing energy use have helped push oil to +$90 per barrel near-record highs. But what many probably don’t know is that China’s double-digit GDP growth is forcing up the price of another major energy source: coal.

The price of coal — the most plentiful energy resource — is rising at an alarming rate: Asia prices are up more than 30% that year, The Wall Street Journal reported Tuesday (subscription required), due mostly to China’s net importer status. China had been a net exporter of coal, but in mid-2007 it imported coal for the first instance. Coal is trading above

$125 per metric ton. In 2003 it traded at about $25 per metric ton. Since January 2007 alone, coal is up more than 140%.

U.S. coal suppliers have benefited from the run-up: Arch Coal (NYSE: ACI) is up about 90% since August 2007; ACI was down about $1.50 to $53.32 in Tuesday afternoon trading. Meanwhile, Peabody Energy (NYSE: BTU) is up about 45% since August 2007; BTU fell 40 cents to $56.12 on Tuesday afternoon.

Continue reading Coal’s price is surging on China demand

Original post by Joseph Lazzaro

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