Coal consumption has increased this year. But its supply has remained tight, causing its price to surge. With winter now approaching the Northern Hemisphere, coal prices are expected to rise further even after China’s intervention to lower prices. Hence, we think it could be wise to buy the dip in coal stocks of Warrior Met Coal (NYSE:HCC), Ramaco (METC), and Hallador Energy (HNRG). Read on.Despite the worldwide push for cleaner energy, fossil fuels such as coal remain relevant. Coal usage in the United States for energy generation has experienced its first year-over-year increase this year, since 2014.
Furthermore, due to the doubling of natural gas prices, U.S. coal prices peaked in mid-November to their highest price since 2009 because producers are unable to keep up with the rising demand for carbon substances. In addition, thermal coal prices tend to rally in winter. And despite China’s intervention to lower coal prices by expanding supply, coal is expected to trade at $159.82 per metric ton by the end of this quarter.
Hence, we think it could be wise to buy the dip in the fundamentally strong coal stocks of Warrior Met Coal, Inc. (HCC), Ramaco Resources, Inc. (NASDAQ:METC), and Hallador Energy Company (NASDAQ:HNRG).