Fossil Fuel: Must You Buy This Commodity?

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With Trump’s policies, Coal is predicted to fall in value. His policy of cutting down the production of the said commodity plays on the prediction as to why it will fall but will it really? Check this out.

As it was mentioned, Donald Trump’s law of the restriction fossil –fuel production was part of his 100 day in the office. This includes coal of course. Scott Pruitt, the assigned EPA leader, sued the previous administration’s regulation on the Clean Power Plan – which looks to diminish carbon production by using a minimum amount of coal.

On China, coal or fossil fuels are on demand. The country is the reason as to why the commodity is surging as oppose to the probability of it falling.

The restriction may be temporary, or at least can be toned down. According to sources, Trump has not spilled out detailed reports about the restriction and so there’s a possibility that it can be toned down. Aside from that, Trump also promised that a day will come where employees who lost their jobs in the coal companies may get their jobs again and coal companies will bounce back in the coming days.

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Research also states that it is possible that coal handling in the current administration will be much more responsive than the previous one.

The amount of exports internationally is tremendous. Like abovementioned with China, the global demand and supply are mostly from China so if Coal drops, it will drop to at an amount of 10 percent. It is a possibility.

Coal is also diverse. Like for example, there are two main types of coal that are demand. One of them is metallurgical coal which is more used in steel production. Another one is used for heating which is what we call thermal coal. Both are the most bought coal and they can trade well in the market.

“Coal likely will have a role in the energy-supply stack for decades to come, barring anything short of an outright ban on fossil-fuel production or consumption.” Ethan Bellamy, a researcher based in Colorado said.  “We anticipate that the elimination of regulatory constraints under a Trump administration on the coal-mining supply chain, along with less onerous emissions restrictions at power generators, could combine to alleviate some further declines in coal demand, and, possibly, to restore some lost market share as natural gas prices rise over time.”

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