Coal stocks get burned

September 21, 2011: 1:50 PM ET

NEW YORK (CNNMoney) -- Shares of most major coal companies are trading near 52-week lows after Walter Energy and Alpha Natural Resources lowered their production forecast due to weakening demand from Asia.

Coal currently fuels 30% of world energy needs. The cheapest energy source in terms of dollars per BTU, it accounts for more than 50% of demand in Asia, which has been a major growth engine for the past decade.

Alpha Natural Resources (ANR) lost 11% of its market cap Wednesday morning after cutting sales estimates for metallurgical coal, which is used in steelmaking. Alpha cited the steep slowdown in Chinese construction activity as the main reason.

Walter Energy (WLT) lowered third-quarter earnings estimates to $1 to $1.16 per share -- substantially below analysts' expectations for $3.24. Its stock plunged 10% on the news.

The recent strength in the U.S. dollar is not helping coal stocks either, as the greenback is negatively correlated to basic materials.

These are among the popular themes on StockTwits Wednesday:

phoneranger: Coal stocks getting slammed on weakness in met coal exports to Asia. Here's a look at the owners. $KOL

douglas_blake: $KOL - lapse! $WLT $ANR leading the plunge. $$

sunshinetrader: All China related plays weak. A new driving theme besides FED, Europe. check out $FXI $JJC $DBA $CQQQ $HAO $KOL $TAO

vcutrader: $ANR was $66 before buying $MEE. Now $24 after buying $MEE. Book value is $8B. Makes sense lol.

ivanhoff: The emerging markets etf is trading at 2yr low. Anything related to China's growth is weak too. $EEM $FXI

KeithMcCullough: Strong US Dollar is strong for America - not the Energy and Basic Materials stocks. $XLE $XLB $UUP

ukarlewitz: Indonesia, which last month was touted as the best mkt in the world, now 23% below its high. $EEM To top of page

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