The touch-paper was Macquarie Research’s mid-month warning to investors that the outlook for US coal producers was becoming increasingly bleak, and that a "wave of bankruptcies" was likely to sweep across the sector.

That wave that may have started to break yesterday.

International Coal News yesterday reported that Tennessee-based Appalachian coal producer Xinergy had filed for Chapter 11 bankruptcy.

Xinergy filed the petition valuing its assets between $US0 and $US50,000 [$A65,000] and between $US100 million to $US500 million in liabilities.

The small producer said the issue was not to do with its operations or management, but rather external forces, such as a number of significant challenges, including increased environmental regulations and reductions in demand due to weaknesses in the economy and lower natural gas prices.

Macquarie has lowered its 2015 and 2016 metallurgical coal price target by $US5 per tonne, and said that there could be even more downside to US coal prices, which are decoupling from international prices, which are also depressed feeding into more production cuts and the likelihood of bankruptcies.

Macquarie kept a neutral rating on Cloud Peak Energy, and kept its $US8 share price target, because the Wyoming-based company, one of the largest US coal producers and the only pure-play Powder River Basin coal company, is in pretty good shape relative to its peers.

But bad news is contagious and, with Macquarie savaging so many other coal stocks, investors are taking their greenbacks elsewhere just in case the US coal producers start falling like dominoes … or Australian junior iron ore miners.