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Investing.com -- Coal stocks climbed on Tuesday as speculation grew about potential production cuts at Chinese coal producers following government mandates.
U.S.-listed coal companies saw significant gains in premarket trading, with Peabody Energy rising 4.5%, Warrior Met Coal (NYSE:HCC) up 4.1%, and Ramaco Resources (NASDAQ:METC) advancing 2.8%.
The rally extended to international markets as well, with Glencore (OTC:GLNCY) gaining 2.3% in London trading and South Africa’s Thungela Resources jumping 5.3%.
The market movement follows an unverified notice circulating on Chinese social media claiming that coal mines operating beyond approved capacity should be suspended and corrected. The National Energy Administration has not immediately responded to requests for comment on this matter.
Adding to the speculation, Morgan Stanley (NYSE:MS) analysts including Hannah Yang reported that China’s National Energy Administration had issued a notice initiating checks on coal overproduction.
The potential supply cuts come as China’s leadership has recently emphasized curbing aggressive price competition across various sectors, promoting a concept referred to as "anti-involution."
China dominates global coal production, accounting for half of the world’s coal output in 2023, according to data from the U.S. Energy Information Administration.
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