Which Coal Stock Heavyweight Will Outperform?

NEW YORK (TheStreet) -- Even as the world braces for Chinese fiscal policy tightening, the country grows at a rate that the world can hardly keep up with. Like a hungry adolescent, China today needs to be fed constantly.

"India can no longer supply all their coal requirements," says Nick Raffan of Sydney-based independent stock research company Fat Prophets. Meanwhile, major coal exporter Indonesia has been reserving a good portion of its resources for the country's own internal needs.

China's coal industry, for its part, is currently far from being self-reliant right now. According to an earnings statement from mining company Joy Global(JOYG), "China's shortage of coal production and rail bottlenecks created the need to substantially increase imports of thermal and metallurgical coal. China was self-sufficient in metallurgical coal until 2009, when imports surged to over 30 million metric tons."

Thus, if India and Indonesia can't do it alone, can Australia? Not likely. Due to infrastructure problems like insufficient port or rail infrastructure, even this major coal exporter currently can't load its coal fast enough. These infrastructure problems are "not being alleviated as fast as China is growing," Raffan says.

It would seem that there simply aren't enough hands available to feed a sufficient quantity of coal to China -- which is, of course, great news for coal producers around the world who could benefit from China's voracious appetite.

And China is hardly the sole variable in the bullish equation for the coal industry; pretty much the whole world is part of it. Raffan says if we leave out developed Europe, some of the increases that we've seen in industrial production figures lately have been "quite extraordinary."

"Outside of Europe we're not doing so badly," Raffin says. Durable goods, for example, are picking up in the U.S., and auto sales and production are picking up worldwide. "So I think the world's going to be lot more positive ... and definitely going to next year."