In trading circles, the bulls are effectively those who believe the forward price will go up and the bears believe it will go down.
At the Coal Trading Association's annual conference this week in New York City, both sides were on display, although sentiment leaned more heavily toward the latter.
Representing the bulls in a light-hearted end of conference debate was Stephen Doyle, president of BtuBaron, who argued in favor of coal's eventual recovery as more supply comes offline and prices eventually recover.
"We are going to have a surviving coal sector that has never been leaner," Doyle said as part of a "Bull vs. Bear" debate that wrapped up the 14th annual conference.
Doyle acknowledged the challenges facing the coal industry, including weak utility demand, crumbling export markets and the effects of the shale revolution.
"The shale ship is so big, it takes a while to reverse the effects we're in," he said. "In my opinion, the market is settled into these weak conditions, but when supply catches up, we're finally going to have some chance to recover losses."
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Potentially, the industry will reap the benefits of an "Act of God," such as a ban on Russian coal imports to Europe, to rebound, he said.
Bears eye technology, court, FX markets
"That would have to be something pretty dramatic," said Seth Schwartz, principal at Energy Ventures Analysis, who presented on the side of the bears in the debate.
According to Schwartz, the US domestic coal market, which will shrink to about 750 million st this year, is not going to recover. That is because the competition, including natural gas and renewables, are getting better technologically while coal has stagnated.
In natural gas drilling, technological improvements have included horizontal drilling rigs that drill laterals three miles long in both directions. Coal technologies include highwall, longwall and dragline mining, technologies that date back decades, Schwartz said.
"If technology doesn't improve, you go out of business," he said. "There have been no technology improvements."
Declining gas rig counts mean little for production totals when average production at those rigs goes up, he said.
Regulated utilities, which Schwartz said have been "hijacked by the environmental movement," will do whatever it takes to make money for their shareholders.
"The power industry is not your friend," he said. "They're not trying to save their coal plants anymore. We are losing the politics."
The US coal industry's future could be determined by the result of a stay motion filed by the state of West Virginia and other states October 23 asking the US Court of Appeals for the District of Columbia Circuit to halt the implementation of rules stemming from the Clean Power Plan until all legal challenges have been resolved, Schwartz said.
The lack of a stay on the Mercury and Air Toxic Standards resulted in numerous coal-fired plant retirements before the Supreme Court remanded the MATS rule back to the the US Environmental Protection Agency in the fall.
"The biggest fight for the future of coal-fired generation is the stay motion for the CPP," Schwartz said. "The power industry has to invest and plan for the future. They're not waiting around."
The politics of the stay are not in coal's favor as the Court of Appeals for the District of Columbia Circuit, which is reviewing the stay, is stacked with Obama administration appointees, he said.
Another major factor hurting US coal markets is the exchange rate for the US dollar, which is much stronger than other currencies.
The first thing traders should be looking at is exchange rates, he said, noting that the 30% increase in the US dollar's strength when compared with the Australian dollar has effectively taken Appalachian metallurgical coal out of the picture.
"The world is awash in coal," Schwartz said. "But prices aren't down in pesos. They're down in US dollars."
And the arguments from the bearish side of the market appear to be winning over the bulls, with Doyle acknowledging at the end of the session that he would "pull a reversal" by the second half of 2016 if gas production does not decline.