OPIS Insights

Barron’s Senior Energy Writer Laura Sanicola and OPIS Director of Data Analytics Andy Blumenfeld discuss what’s ahead for coal this week.

Despite a cold snap that should theoretically benefit all coal stocks, only Peabody Energy has seen significant gains in the coal market performance in early 2026. The outlook for 2026 remains positive for thermal coal, as natural gas prices remain elevated and AI-driven power demand increases, with coal units expected to operate at higher capacity factors throughout the year.

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider. And I’m here today with Andy Blumenfeld, Director of Data Analytics at OPIS. Andy, thanks for joining me.

ANDREW BLUMENFELD: I’m happy to be here.

SANICOLA: Great. So let’s talk coal. It’s been a real cold snap at the start of twenty-twenty-six throughout much of the country. And in theory, you’d imagine that would be very good for, coal shares, given that when it gets very cold, natural gas prices rise since we use gas for heating, and then coal becomes more competitive and thermal coal that is, and it gets used more for heating purposes. But the only real breakout stock that I’ve seen for twenty-twenty-six is Peabody Energy. So maybe you could help me understand and help us understand why that is.

BLUMENFELD: Sure. So Peabody has a couple of things going forward this year.

They have the largest coal mine in the United States, and not only that, one of the largest coal mines in the world, which is the North Antelope Rochelle mine in the Powder River Basin, plus two other fairly good-sized mines in that same region.

And there is some upside flexibility in terms of the production capability of those mines, and there is some opportunity for them as prices go up for them to place more coal into the market. But I think with Peabody, one of the things that has stood out for them this year is they are bringing on a new mine.

It’s actually a replacement for a long mine, an older mine in Australia. It’s called Centurion. It’s gonna produce a high-quality metallurgical coal, and we’ve seen prices out of Queensland for this coal to move up close to two hundred and fifty dollars. It’s almost a fifty-dollar increase over just the last roughly four or five weeks.

And this mine is starting its longwall production this week according to the company. So there is some some of this upside, and I think Peabody is in the right position to capitalize on some of of both of these situations, both the Australia and the US thermal.

SANICOLA: So met coal prices, that’s the coal used for steelmaking, are higher than thermal coal. Why is it then that some of the met coal stocks in particular are not doing as well to start the year?

BLUMENFELD: So one of the reasons we’ve seen an increase in the price of metallurgical coal this year has mostly been heavy rains that have hit Queensland and has curtailed some of the production.

So we think that the price is probably gonna settle back down, but still out of the US, it’s it’s become a little less competitive because the quality of the coal that’s being produced and shipped overseas is not a perfect match to the marketplace. So that’s why some of the US producers, and given the longer freight distances in that, haven’t really enjoyed as much of the upside, at least so far this year.

SANICOLA: So what does the outlook look like for the rest of twenty twenty six?

BLUMENFELD: So as you mentioned, the storm really did increase the utility coal burn for power generation in especially in late January.

We’re expecting as natural gas prices stay, you know, at their current levels or move higher as demand, you know, power demand with AI and everything else moves higher, that the coal units are gonna continue to operate at a fairly higher much higher capacity factor. So we think that the thermal coal demand is gonna continue to improve through the course of the year. And for those of us who those who are producing thermal coal should see some modest price increasing through the through the course of the year and therefore should reflect in their stock price.

SANICOLA: Alright. Thanks so much for breaking it down for us, and thanks everyone for joining. We’ll see you next week.