That was one of the best posts here.
Comments about met coal ... You are looking at demand part of met coal only, sure high demand would help a lot. But thermal demand did not go up, in fact demand is down since 2012 and yet the prices are moving to, as you put is to "their historical averages".
Now, maybe I am uninformed (very possible), but the met coal demand is up in the past 2 years by approximately 3% or so each year. The problem is the the supply is up even more. We suffer from the consequences of massive CAPEX that happened as a result of $200-300 met coal 3-4 years ago and the supply that is hitting the market for the past 2 years or so. Case in point: Leer was under development for several years and hit the market with fresh supply just 4 months ago. It won't be long until that wave of added supply will start disappearing. Now, USA and Canada coal is at a disadvantage given current state of aus dollar and geographycal&geological issues, so they will be (and are) closing mines first, but be sure that the rest of the world is not investing in coal for a couple of years now. You can look at CAPEX numbers from many public coal companies: they are down substantially ... it will show in the supply sooner or later.
So to sum up: companies are only closing mined that are producing coal at or below cash costs. But they wont be investing into coal mines that produce less than 30% of cash margins. And they have not been investing for the past 1.5-2 years.
So, the million dollar question is: What is the price that gives above 30% of cash margins, say, to Australian producers?
EIA will publish February inventory numbers next Monday.
Also, given that July's PRB futures are at $13.28, we can expect another bump in "EIA Coal Spot" next Monday. We are approaching $3 cash margins per ton on PRB spot coal spot price ...
In the past two years lower volumes were sold at lower prices, now we are seeing higher volumes sold at higher prices. 2014 July's PRB contacts are $13.20 today. We are soon (in 2 months) going to see something not seen since 2009: that spot sales increase average sold price, in other words, that spot price is higher than coal that was previously priced with long term contracts. It will probably end in 8 months or so. Hard to believe that in 2016 PRB spot will be at $15.20 (the current price of PRB contracts)
Westmoreland Coal Co. (WLB)
Yes, debt is a #$%$ in a downturn!
I do not know how to respond to that. Please behave like an adult.
Why are you asking me? If you want to see it posted, find it and post.
Now it is up 17 cents end trading at $13.55/st!
Looking at ACI's PRB pricing for 2015 ... it looks like we are going to see and improvement ... first time maybe in 3 years or so. This is a big "news" during earnings report ... which will be more the offsetted by decline in Met Coal pricing.
Last quarter for 2015 ACI priced 52.4 mill tons in PRB for 13.78 .... now average price for PRB 2015 is $13.90 ... it does not take a Harvard Study (btw, where is jimjohn320?) to figure out that the average is going to move higher. Again, the distribution of priced tonnage is skewed towards first half of the year (but not by much) so the average price of unpriced 2015 contracts is probably a little higher than $13.90.
If only they can keep cash cost under $11 during 2015 ... it will bring around 400 mill EBITDA just from PRB in 2015. Now 2015 looks like cash flow positive year if Met be at $140 Aus FOB (which is somewhat higher from current $120)
I am far from making money on ACI ... all that averaging down brought my average price to high 7s ...
I have never thought that ACI will be up first day after JRCC's BK
I am quoting my old posts: "When JRCC files ch 11, it will bring the whole sector down for several days just like with PCX". I would have said the same yesterday ... cannot believe that ACI (and whole sector) is green today.
red_gorilla_ff0000 • Aug 9, 2013 4:34 PM Remove 0users liked this postsusers disliked this posts0Reply
They cleaned up balance sheet well. Now they delayed BK by 3 months ... which makes it latest in Q2 2014, probably earlier.
Their CFO is running out of rabbits ...
Looking how JRCC was able to delay BK (their loan buybacks last year, refi several month back, and now squeezing operations), I start to think that even with another 2-3 years of low met coal prices ACI will be able to pull those stunt and avoid BK. Less
JRCC is reporting on Aug 9th ...
by red_gorilla_ff0000 • Aug 7, 2013 1:17 PM Remove
JRCC is reporting on Aug 9th before market opens ... probably another $30 mill+ cash loss. JRCC will not survive thru Q1 2014. By now, they probably have under $60 mill in cash (as of Aug 7th, 2013) and are losing just over $10 mill/month. So if no financial trick happen soon, they have 6 months, till Feb 2014, probably less. When JRCC files ch 11, it will bring the whole sector down for several days just like with PCX :(. Maybe that will be the bottom. Less
there they said that thermal coal inventories were 130 mill tons in Feb 2014 ...
I was expecting closer to 126 mill tons ... they will publish a more precise number in 10 days (in Electricity Monthly). Last month they said that inventories in Jan were 137 mill tons just to correct that to 132 mill ton 10 days later ... government ... lack of accountability.
Also, they predicted that inventories will bottom in Aug 2014, at 122 mill tons.
He was not referring to you in his "ButtBuster post".
Maybe on how retail investors short at the bottom and go long at the top while thinking more that they are better than average?
At least, unlike jimjohn320, you are in money on you short position as you started posting when ACI was at $7 or so.
Maybe you should stop repeating this message 5 times per day.
On Feb 4th 2014, when ACI close at 4.25 you wrote:
george_bush_is_a_loser • Feb 4, 2014 6:47 PM Flag
I still think ACI should drop 20% on such huge loss and low revenue. This is just another pump to get more sucker in. No coal growth, how will ACI survive with all the losses every Q? How many Q of losses now??/
This will drop soon!!!!!!!!!
I can find 50 posts like that easily. Why are you repeating that every day?