Coal company stocks led a rally on Wall Street Friday after published reports said that a Japanese steel maker paid higher prices for coal than expected.
JFE Holdings Inc. reportedly agreed to pay $200 per ton for coking coal in a three-month deal with Australian coal miner BHP Billiton Ltd.
The amount was higher than expected, said William Burns, an analyst with Johnson Rice & Co. Burns, who expected JFE and other companies to pay only about $150 per ton, said this shows how aggressive countries have become in competing with China for natural resources.
"China has become a black hole, and the Japanese steel makers are trying to lock up their supply," Burns said.
The BHP deal probably will set the price for other coal companies going forward, Burns said.
The New York Times also reported Friday that lawmakers from coal states have moved to impose a two-year moratorium on new regulations for greenhouse gases. The lawmakers, including Sen. John Rockefeller of West Virginia, want to delay action by the Environmental Protection Agency to allow Congress enough time to pass its own climate rules.
Coal stocks soared in Friday trading after the news.
Patriot Coal Corp. shares surged $1.76, or 9 percent, to $20.86 in afternoon trading. James River Coal Co. shares jumped $1.21, or 7 percent, to $18.10. Massey Energy Co. shares added $2.35, or 5 percent, to $48.87, and BHP shares added $2.46, or 3 percent, to $78.82.
Other energy commodities also rallied Friday, as well as the broader markets, lifted by a better-than-expected jobs report.
Oil and wholesale gasoline prices neared their highs for the year after the government said employers cut fewer jobs than expected. The Labor Department report for February suggested that the economy may soon add jobs and put more Americans back into the daily commute.
"People expect gasoline demand improvement as we proceed through the year," energy analyst Jim Ritterbusch said. Ritterbusch is president of energy consultancy Ritterbusch and Associates.
Elsewhere, China Premier Wen Jiabao said his country is on track for 8 percent growth this year and stimulus spending will continue. China is consuming an increasing share of the world's natural resources, and it's expected to boost demand for oil for the first three quarters of this year.
On the New York Mercantile Exchange, benchmark crude added $1.31 to $81.52 a barrel. Gasoline futures added 3.49 cents to $2.2686 a gallon, heating oil added 2.58 cents to $2.0945 a gallon and natural gas added less than a penny to $4.584 per 1,000 cubic feet. All contracts were for April delivery.
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