The Fund's largest detractor in the quarter was Consol Energy (CNX), which fell 19% as lower coal prices and regulatory uncertainty punished all coal producers. The weak quarter also made CNX the largest performance detractor for the YTD with a 15% decline. Slowing Chinese demand has reverberated into worldwide price compression in met coal, which is used to make steel and is less than 15% of our CNX appraisal. Thermal coal used for power generation comprises much more of CNX's output and value. Less than 5% of the thermal coal CNX sold in 2012 went to power plants that are at risk of shutting down in the near term based on regulatory actions. Importantly, half of Consol's value is tied to its natural gas assets in the Utica and Marcellus shale plays, which arguably benefit if coal faces increased environmental regulation. The company also owns a port in Baltimore.
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