CEIX - These Stocks Red Hot in 2022 Won't Repeat the Feat in 2023
Coal stocks like Peabody Energy (NYSE: BTU) and Consol Energy (NYSE: CEIX) may be among 2022's biggest winners, but don't look for the same sort of bullish results in 2023. Investors planning to stick with these stocks for the long haul may want to brace themselves. The circumstances driving thermal coal names higher this year are already unwinding as we prepare to flip the calendar.
Natural gas prices were certainly high in late 2021, but few people expected the commodity's price to continue racing to highs reached in the middle of this year. With no other cost-effective choices readily available, many of the world's electricity production plants were forced to revert to generating power by burning coal rather than gas, even if only temporarily. To this end, the International Energy Agency estimates worldwide coal consumption will rise 1.2% this year, eclipsing 8 billion tonnes of usage for the first time.
It's proven a boon for miners like the aforementioned Consol Energy and Peabody Energy, which dig up the thermal coal well suited for this application. Stocks of these two outfits are up 182% and 220% year to date, respectively, fueled by what's been roughly a tripling of thermal coal prices since the advance began back in 2020. Shares of thermal coal miners Arch Resources and Alliance Resource Partners have been star performers this year as well, even if not as strong as Peabody and Consol.
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These Stocks, Red Hot in 2022, Won't Repeat the Feat in 2023