Coal prices remain flat for fourth week

By Daniel Tyson, The Register-Herald, Beckley, W.Va.

April 26--Coal commodity spot prices have remained even, since the beginning of April, a measure of how the industry is hurting.

For the fourth consecutive week, Central Appalachian coal has sold for $42.30 per short ton, according to the U.S. Energy Information Agency.

"Prices are way too low," said
Bill Raney, president of the West Virginia Coal Association.

Central Appalachian coal is used for generating electricity and exporting, said Raney, which explains why weak demand continues in the face of the switch to natural gas, declining exports and tighter environmental regulations.

The price of Central Appalachian coal is expected to remain low, said Raney, adding the high cost of mining this region's coal makes it difficult for companies to find buyers. The region's mines, he said, are further away from roads, rails and rivers, transportation modes used to ship coal and thus driving up prices.

This is specially worrisome as power plants that still use coal want their supply shipped by barge.

Central Appalachian coal's spot price also remained in neutral last week, selling for $1.69 per million British Thermal Unit, mmbtu, according to EIA.

That price was a dime cheaper than Northern Appalachian coal on the spot market, EIA reported.

In February, coke exports tanked to 12,337 short tons, the lowest in half a decade, the EIA found.

This comes as U.S. coal exports continue to decline as Asian nations cut back on manufacturing steel amid a regional recession.

In an analysis of the industry, the Economic Calendar wrote, many "coal companies won't be able to survive the new norm. We have already seen a bunch of bankruptcies and high cost miners (mining companies) could still struggle as low prices remain."

The analysts continues, "The bankruptcies; however, will help the remaining miners by removing some supplies form the market and this increased scarcity could help lift prices."

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