Commodities & Metals

Patriot Coal Leads the Way to New Lows

Today’s not a good day to be in the coal business. Miner Patriot Coal Corp. (NYSE: PCX) announced this morning that it was lowering both shipment and price forecasts for metallurgical coal for this year and next based on “recent developments involving the potential default by a key customer.” The company did not identify the customer.

Patriot dropped its price estimate by $25-$20/ton and estimated shipments of 3.9 million of currently priced tons in the remainder of 2012 and just 200,000 currently priced tons in 2013. Pricing on the 2013 shipments is just $122/ton, compared with $145/ton for the rest of 2012.

Shipments of thermal coal used to generate electricity have been hurting coal share prices for nearly a year now as natural gas prices remain very low. But met coal, which is used in steel-making, has fared a little better and met coal producers have had some backstop for the downturn in thermal coal sales. But not after today.

Patriot is dragging the entire coal mining sector down with it. Peabody Energy Corp. (NYSE: BTU) is off -4.4%, Consol Energy Corp. (NYSE: CNX) is off -4.1%, Arch Coal Inc. (NYSE: ACI) is off -4.6%; Alpha Natural Resources Inc. (NYSE: ANR) is off -8.8%, Walter Energy Corp. (NYSE: WLT) is off -6%, James River Coal Corp. (NASDAQ: JRCC) is off -4.3%, and Cloud Peak Energy Corp. (NYSE: CLD) is off -3.2%. And the more met coal a company mines, the worse the story. That’s why Alpha and Walter are down so much further than the others.

Peabody has posted a new 52-week low this morning of $26.72. James River also struck a new annual low of $3.58, and Alpha posted a new low of $11.95.

Patriot, of course, has done even worse. Shares are down -15.4% at $4.09, and the stock’s new 52-week low is $4.08. The prior range was $4.82-$24.99.

Paul Ausick

Want to Retire Early? Start Here (Sponsor)

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.