WSJ article points out that this is 17% decline in price from last year. The Tohoku Electric Power contract carries deliveries to 3/2014. These very low coal prices due to overabundance of thermal coal on seaborne market. Australian mines are shutting down, laying off and delaying terminal expansion projects. It's a buyers market and coal will move sideways for another year or so... don't get too excited... I expect ACI to be range bound for at least a year... it's accumulation time
disagree on the sideways movement call. the market is fwd looking & there is NO reason that ACI should trade this low. the only reason would be a fear of BK. we all know that with rising NatGas, pick up in demad on metallurgical coal, new EPA head that seems to not hate coal, etc....things are looking quite up!
ACI themselves don't expect to be profitable this year or next and they have arranged their finances accordingly. Coal prices have stablized but will remain historically depressed for at least a year. What I expect is up and down sentiment but with overall sideways movement for at least a year. range bound between 4-7/share. I am long ACI and plan to hold to 30/share possibly in 3-5 yrs.
Yep, read that yesterday. And it said that Xstrata needs $100 to break even. Japan needs better quality lower Sulpur as does Europe. Lots of cheap nasty stuff out there, PRB coal will continue to be in demand. When the Panama canal widening is completed in 18 months it will all be sent from the PRB through the Houston terminal expansion. Unless a Pacific NW terminal/s come to fruition. Japan are gong to need lots of high quality coal, the good thing is that as more and more unprofitable mines close its the low cost/ high quality coal regions will take their business. Markets are forward looking, just like turning a large ship, it takes time and patience. Some desperation it seems in some of the deals signed recently. Hyundai signed a Met coal deal with a large Canadian supplier. ACI has hedged quite well, locking in better terms than say BTU.