The Ultimate Commodity Update
Joy Global has outdone itself ... yet again.
"Looking to coal, Joy Global reiterated Peabody Energy's interpretation of a major structural shift in these markets, driven by China's transformation into a net importer of both thermal coal and coking coal. Total Chinese coal imports reached 100 million tons in 2009, but this is merely the beginning of a long-term trend."
"Joy Global reports that Coal India -- reportedly the largest coal producer in the world -- now anticipates annual import demand from India reaching an incredible 200 million tons within the next few years. A recently reduced outlook for domestic production drives this bullish call. Fools will recall that industry expectations for Indian import demand for coal in 2013 stood at just 80 million tons as recently as June 2009. With these sorts of multiyear drivers in play, it's no wonder that producers in places like Australia are pulling out all the stops to ramp up export capacity. As I have stated previously, I consider investment exposure to Pacific basin seaborne coal one of the most attractive opportunities for investors today."
"Of course, all of these bullish long-term indicators for commodities like copper, iron ore, coking coal, and thermal coal result in a strong business environment in which mining equipment rivals Joy Global and Bucyrus will continue to vie for dominance. After a key strategic acquisition, I see Bucyrus with the upper hand, but Joy Global's $0.20-per-share upward revision to the low end of its 2010 earnings guidance reminds Fools not to underestimate the happiest name in mining equipment."