Patriot Coal tumbles after saying key customer could default on order

Patriot Coal (PCX) is sinking after the company last night announced that one of its key customers could default on its order for Appalachian met coal. As a result, Patriot now expects to sell 3.9 tons of Appalachian met coal during the last three quarters of 2012, down from its previous guidance of 4.9 tons. However, the company expects the average selling price for the remaining coal to rise to $142 per ton, versus its previous guidance of $138 per ton. For 2013, Patriot now expects to sell 0.2 tons of Appalachian met coal, down from its previous guidance of 0.4 tons. The coal miner expects its average met coal selling price in 2013 to come in at $122, up from $120. Patriot noted that the average spot market price for this type of met coal is now $25-$30 per ton lower than what the customer that might default had promised to pay. In early afternoon trading, Patriot dropped 66c, or 13.87%, to $4.17. Other coal miners also fell, with Arch Coal (ACI), Peabody (BTU), and Alpha Natural (ANR) all dropping significantly.