New York (Platts)--26Mar2009

Coal prices continue to drop, month over month, following most energy
commodities. The small ray of sunshine is that over the final two trading days
for April deliveries, volume picked up in over-the-counter trades. The fourth
quarter for NYMEX look-alike trading was especially active.

The biggest losers in the month-over-month averages were for NYMEX look-alike
and Powder River Basin 8,800 Btu/lb and 8,400 Btu/lb coals, while the eastern
12,500 Btu/lb, -1% sulfur CSX-delivered coals lost comparatively little value.

For April, the final monthly average for NYMEX look-alike coal was
$47.77/short ton, a $9 plummet from the March average of $57.12. The February
average was $62.57, while January's was $67.40.

Eastern 12,500 Btu/lb, -1% sulfur CSX-delivered coal held its value better
than the look-alike product since the start of the year, declining about $6
over this period. The April final monthly average was $51.91/st, less than $2
down from the March average of $53.86. February's final monthly average was
$54.30, and January's was $57.94.

Powder River Basin 8,800 Btu/lb coal lost ground by more than $2 for the month
over month averages. For April, the final monthly average was $9.34/st, down
almost 20% from March's $11.57. For February, the monthly average was $13.44,
and for January, $13.03.

And for PRB 8,400 Btu/lb coal, the April average was $8.36, again down more
than $2 from the March average of $10.43. For February, the average was
$11.98, gaining ground from January's average of $11.32.

The spread between the CAPP 1% sulfur and compliance coal was $1.68 for the
April average, down from the March average of $3.42 and February average of
$2.83. April gained 2 cents from the January average of $1.66.

In reaction to the declining prices, producers have been cutting back on
tonnage, by intermittently idling mines or in some cases, shuttering them
until better times. Kevin Crutchfield, president of Alpha Natural Resources,
said at a recent conference he considered Central Appalachian producers as
"treading water" now, as coal selling prices are near the production cost, and
that's not including the return that investors expect.

Nick Carter, president and chief operating officer of Natural Resource
Partners, at the same conference, said that he sees coal prices falling
through the back half of this year and no forward price visibility.

This is an excerpt. Similar stories appear in Platts Coal Outlook.
See more information at http://coaloutlook.platts.com