NEW YORK (TheStreet) -- Shares of Peabody Energy (BTU - Get Report), the largest private-sector coal company in the world, were down 5.6% to $4.80 in afternoon trading Tuesday after Canadian miner Teck Resources (TCK) said Chinese demand for steel-making coal has weakened.
Imports for the first two months of 2015 have been far below 2014 levels, CEO Don Lindsay said Tuesday as Teck announced lower earnings and a 67% dividend cut, according to Reuters.
Lindsay was unsure if the weakness in China would continue and said indications from customers showed that the drop is "unusual" and that demand could rise again.
"We'll have to see how the year unfolds, but certainly it has been weak so far," Lindsay said on a conference call after Teck reported its first-quarter earnings.
The company added coal demand outside of China has stayed strong.
More than 9.9 million shares had changed hands as of 1:47 p.m., compared to the daily average volume of 12,003,900.
Insight from TheStreet's Research Team
Dick Arms commented on Peabody Energy in a recent post on Real Money Pro. Here's what Arms had to say about the stock's chart:
The stock of Peabody Energy may have found support after a long decline. Having made a low earlier this month it has tested it in the last few days with somewhat lower volume. BTU is on the verge of breaking the descending trend line but has not yet done so. Traders looking for a turnaround might buy some of the stock in here, realizing that the downtrend is still intact, raising the risks. But the crossover of the moving average convergence divergence (MACD) indicator is encouraging. A stop should be waiting just below the early April lows.
Separately, TheStreet Ratings team rates PEABODY ENERGY CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate PEABODY ENERGY CORP (BTU) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself."
You can view the full analysis from the report here: BTU Ratings Report