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According to the U.S. Energy Information Administration, U.S. coal-fired generation in 2021 is expected to be 22% more than in 2020, mainly because of elevated natural gas prices. However, coal supplies are tight because production was halted for several months, and coal mines operated at reduced capacity, during the worst of the pandemic. And because output is unlikely to match the growing demand, prices should keep soaring.
Given this backdrop, we think fundamentally sound coal stocks SunCoke Energy, Inc. (SXC) and Ramaco Resources, Inc. (NASDAQ:METC) could be the ideal bets on their recent price dip.
