Can someone lend a flashlight to UNG? It's fumbling around in the dark looking for a bottom before it hits zero. HJ showing some stability here. My model price coming into today was about .055 and we got down to .069 on the lows. I see strong support for UNG at zero. LOL.
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The ACD Method
- Thread starter sbrowne126
- Start date
Don't look now but the Russell 2k has already corrected 8% off it's highs.
Mav, OTM flies still good for downside protection?
Also, any coal miners with exposure to China and Asia that you know of?
Also, any coal miners with exposure to China and Asia that you know of?
Also, any coal miners with exposure to China and Asia that you know of?
Three China H-shares listed here in HK you could look at:
Yanzhou Coal (Yahoo 1171.HK)
China Shenhua Energy (1088.HK)
China Coal Energy Co (1898.HK)
All are decently liquid with tight spreads. I note Yanzhou also trades on NYSE (YZC)
Some recent colour on the demand/supply dynamics in China:
http://bit.ly/2dI8iw5
Three China H-shares listed here in HK you could look at:
Yanzhou Coal (Yahoo 1171.HK)
China Shenhua Energy (1088.HK)
China Coal Energy Co (1898.HK)
All are decently liquid with tight spreads. I note Yanzhou also trades on NYSE (YZC)
Some recent colour on the demand/supply dynamics in China:
http://bit.ly/2dI8iw5
Thanks, but it does leave me with questions.
I had in mind US Coal miners per the recent discussion on this thread about US coal prices increasing due to export to China.
A second play I had in mind for the US coal miners is if Trump wins, and polls are too close to call (within the margin of error) as far as I can see, he has said he will favour the clean coal initiative, which will be good for the US coal miners who are exporting and also have a significant domestic footprint.
That's my thinking at least, but reading the article you linked to, China has actually been capping domestic production, with more mines being developed to cover those that will be closed. That can't be positive for US coal exporters?
As a by the by, I see YZC bottomed out early this year and has since doubled in price. That would have been a great trade for anyone trading/following those stocks.
Yes, OTM flies are getting cheaper as vol gets more expensive. I suspect vol will go even higher as we see the final polls going into the weekend. They said the odds of Trump winning were the same as the Cubs coming from behind 3 games to 1 to win the World Series. Well, the Cubs won the World Series...bet accordingly.
interesting article, http://vixandmore.blogspot.com/2016/11/vix-median-reversion-and-five-year.html those spikes will kill you though!!
Natty gas +54 BCF, in line with expectations.
Thanks, but it does leave me with questions.
I had in mind US Coal miners per the recent discussion on this thread about US coal prices increasing due to export to China.
...........
That's my thinking at least, but reading the article you linked to, China has actually been capping domestic production, with more mines being developed to cover those that will be closed. That can't be positive for US coal exporters?
Apologies, hadn't read back that far.
China is currently a net importer of coal but the Overview this recent piece from the IEA mostly refers to import declines:
https://www.iea.org/publications/freepublications/publication/KeyCoalTrends.pdf
The China thermal coal futures have been ripping up all year:
https://www.quandl.com/data/ZCE/ZCF2017-Thermal-Coal-ZC-Futures-January-2017-ZCF2017
If the data on the deferred contracts is accurate, the curve is in backwardation, but I assume there's seasonality effects at play.
An industry insider last week commented that he expected thermal coal imports may drop 12% next year. Those imports were up 36% year-on-year to September, but now the supply shortfall is narrowing.
The State has spoken:
"The recent coal price surge in China was irrational and unsustainable, an official said on October 31, predicting that prices will retreat as supplies increase. There is no basis for further rises in coal prices, as supplies, freight volume and inventories have all rebounded.
Coal stocks at five major ports in north China's Bohai Rim region have risen 47.5% from the lows of previous weeks to 15 million tonnes, while inventories at major power plants have increased 35.4% to 65 million tonnes, he said. Despite recovering supplies, coal prices are still climbing, showing that prices are out of line with fundamentals and that speculation is playing a role, the official pointed, attributing the price increases to a government campaign to cut ineffective production and the onset of winter. According to the NDRC official, as more efficient producers fully extend their capacity and distributors put inventories on sale, supplies will further increase in winter and prices will fall"
Still tight enough that a colder than anticipated winter might be short-term bullish for US coal producers.
Apologies, hadn't read back that far.
China is currently a net importer of coal but the Overview this recent piece from the IEA mostly refers to import declines:
https://www.iea.org/publications/freepublications/publication/KeyCoalTrends.pdf
The China thermal coal futures have been ripping up all year:
https://www.quandl.com/data/ZCE/ZCF2017-Thermal-Coal-ZC-Futures-January-2017-ZCF2017
If the data on the deferred contracts is accurate, the curve is in backwardation, but I assume there's seasonality effects at play.
An industry insider last week commented that he expected thermal coal imports may drop 12% next year. Those imports were up 36% year-on-year to September, but now the supply shortfall is narrowing.
The State has spoken:
"The recent coal price surge in China was irrational and unsustainable, an official said on October 31, predicting that prices will retreat as supplies increase. There is no basis for further rises in coal prices, as supplies, freight volume and inventories have all rebounded.
Coal stocks at five major ports in north China's Bohai Rim region have risen 47.5% from the lows of previous weeks to 15 million tonnes, while inventories at major power plants have increased 35.4% to 65 million tonnes, he said. Despite recovering supplies, coal prices are still climbing, showing that prices are out of line with fundamentals and that speculation is playing a role, the official pointed, attributing the price increases to a government campaign to cut ineffective production and the onset of winter. According to the NDRC official, as more efficient producers fully extend their capacity and distributors put inventories on sale, supplies will further increase in winter and prices will fall"
Still tight enough that a colder than anticipated winter might be short-term bullish for US coal producers.
Thanks for giving clarity, much appreciated.