Coal prices have more than tripled since the beginning of 2020. Demand continues to grow with natural gas prices rising, while supply has been trending lower for many decades. Read more to find out why Alliance Resource Partners (NASDAQ:ARLP) has major upside potential.ARLP is this Week’s Featured Stock
Since December 2020, coal prices have soared from $50/ton to over $200/ton. Some of the major factors for strength in coal prices are the rising price of natural gas, years of underinvestment in CAPEX, and utilities in the US switching away from coal due to environmental regulations.
During the pandemic, coal production dropped even more, while demand has turned out to be more robust than expected. Natural gas production and transportation have also been disturbed by the same supply chain issues that are affecting so many industries across the world. As a result, many countries are having to increase coal consumption to meet the shortfall.