Raymond James lowered its 2013/14 met coal price forecast due to resilient supply growth and slowing demand and believes a recovery could be longer than expected given declining global GDP growth and a potential slowdown in China demand. As a result, the firm downgraded ....
Arch's impact from China is 0 today.
Arch's is shipping PRB Coal to the utiilities.
Arch is looking to expand in China because the have "cleaner burning" fuel which China needs.
Arch is shipping some Tonage (I'd have to go look to Europe) where NG is $13-14.
All of Raymond James analysis has already been priced in these stocks - that's why we are at historic lows.
In terms of production - all major US coal have shut down their high cost mining operations and contract mines which is reducing coal supply.
US electrical generation is only down 7-10% from 43% to 37-39% of total US Power (these % are guesstimates - I'd have to go research the actual numbers), point being US Coal demand is not down 90% which is what has happened to the stock price.
ETF's took the price down - complete knee-jerk throw the baby out with the bathwater response.
I'm a hold - looking for 7-8 by Nov 2013. I have a signifcant investment in ACI - they are on the bottom, and they are doing the right things to position the company for the rebound in coal.