Just ten months ago people were buying PRB coal for $7.2/st, now you have to pay $10.7
For those of you that was around for more than a year, if you want to relive
those wild days, google article "Bargain hunters lift PRB thermal coal spot price"
from June 19th 2012. We have gone long way since then!
This summer, same time as last year, the same coal will go for 11.5-12. Just during one year the spot price of PRB will have recovered more than 60%. Btw, in 2011 the same coal was going for $12.5-13. While we will not get there in 2013, we are going to have slightly higher prices than that in 2014 (depending on when producers will bring more production online, I doubt that $12.5-13 will be tempting enough).
Congratulations to all survivors!
The bottom in the business (not the price of coal, and obviously not in stock price) was sometime during Q4 2012 - Q1 2013 (probably in Q1). From now on most metrics are going to improve, not YoY right away, but it will start with QoQ improvement in Q2. We already saw higher new pricing of 2013 PRB during Q1 than it was in Q4, and will already see thermal coal price improvement during this quarter. Not only new pricing for 2013 PRB will be higher, average price of PRB sold in Q2 is going to be higher that $12.68 in Q1. If that will not tell people that recovery is real I do not know what will.
Now, all we need is for met coal futures to go up 20%+ and everyone who bought ACI in 2012 and
later will make money ... including you, bill_billingsly. Recent buyers could make a killing,
but probably most will sell after a decent gain after non-APP coal recovery become more obvious
and won't be around for Met Coal recovery.
thanks for the insight...no doubt, it's just matter of time..valuations have become so cheap it is really hard to believe considering wall st usually looks out 6 months to a yr...the heat of summer will burn thru this big inventory pile that is holding everything back...the builders are the perfect example of extreme disvaluation to now high valuation...once the worm turns, money flow will be back...we will have alot of resistance levels to get through which takes time...ANR is a better play from here I think, they have done much better cutting costs and debt to equity also better...ACI shouldn't have borrowed so much money now costing alot in interest...sitting with a billion in cash doesn't help anything but the lenders...cnx runs the tightest ship..yr end only had 30 million in cash but 1.5 billion available in credit as needed...that the way to run a company. But, %, ACI has more upside...good luck to all long coal sufferers like myself...taking 2 yrs of beatings...UH .still believe in the sector, you can't replace coal mines without huge expense and 10 yrs of permiting...that in itself tells you eventually it will become worth alot more..good luck