Goldman Sachs Slams Coal in Downgrade

Alpha was down almost 10% at one point on Friday morning. Goldman Sachs lowered its metallurgical coal price projection for to $141 per metric ton this year from $150. The firm also sees lower prices in 2015 and 2016 as well. Friday’s call is on the heels of higher output in Australian output, as well as slowing growth of Chinese imports. Another issue is limited supply rationalization in the United States. The current oversupply issue may even increase in the coming years.

Goldman Sachs also maintained a Neutral rating but lowered its target on Walter Energy Inc. (NYSE: WLT) to $10 from $12 in the call. Walter shares were down almost 6% at $10.30 in mid-day trading on Friday.

Arch Coal Inc. (NYSE: ACI), a coal stock that we recently said could double in 2014 under the right circumstances, was down more than 3% at $4.62. The key exchange traded fund covering the sector, the Market Vectors Coal ETF (NYSEMKT: KOL) was down 2% at $18.27

Alpha Natural Resources, the worst hit in the Goldman Sachs call, was down almost 7% at $5.12 in mid-day trading. Its stock has traded in a range of $4.78 to $9.05 in the past 52-weeks.