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  • Armstrong sees US coal price rebound, but not for a year or more
    来源: 发布日期:2016-08-13 21:52:43 发布者: 共阅765次 字体:
    US coal buying should pick up in the final months of 2016, but prices are unlikely to rise much until the market rebounds in late 2017 or early 2018, Illinois Basin thermal coal producer Armstrong Energy said Thursday. 

    "Overall, coal spot prices have trended up slightly over the past months, but there is still an overhang of production capacity in our market," Hord Armstrong, executive chairman of the St. Louis-based company that bears his name, told analysts during a conference call on its second-quarter earnings. 

    Armstrong, the parent company of Armstrong Coal, which mines exclusively in western Kentucky, sold 1.4 million st of high-sulfur coal in the April-June period, compared with 2 million st in the year-ago period due to lower demand and coal-to-gas switching by electric utilities. 

    In the first six months of 2016, the companys sales totaled 2.8 million st, compared with 4 million st in the comparable period in 2015. 

    But that still left Armstrong on track to meet contracted and priced sales of 5.6 million st for all of 2016, the company said.

    The companys coal sold at an average price of $42.65/st in the latest quarter, or roughly $3/st less than the $45.68/st fetched a year earlier. And in H1, the coal went for $42.55/st, compared with $47.31/st in the first six months of 2015. 

    At the same time, Armstrongs cost of sales increased to $35.81/st in Q2 from $34.41/st a year earlier. In the first six months of 2016, its cost of sales averaged $36.40/st, down from $37.20/st a year ago. 

    Production at Armstrongs Parkway underground mine in Muhlenberg County will cease by the end of this year and the mine will close permanently because its reserves are "virtually depleted," according to Marty Wilson, Armstrong president and CEO. 

    In late 2015, Parkway was reduced to a single continuous miner unit and Armstrong closed its Midway surface mine in Ohio County, Kentucky. 

    In response to a question, Wilson said Midway could be brought back online if demand warrants it, although there are no current plans to do so. 

    "We certainly could get back to 6 million tons plus [annually] in short order," he said. 

    In 2014, before the market decline deepened, Armstrong produced and sold a record 9.4 million st. 

    As it tries to ride out the downturn, Armstrong is slashing spending. "We are focused on the things we can control to some extent, such as capital spending," Wilson said, adding capital expenditures were less than $650,000 in Q2. 

    Hord Armstrong said that, to the extent buyers still have some open positions for 2018 and 2019, "coal prices will increase further and there will be escalation of buying. We do see some positive gains, although we dont see a rebound in the market until late 2017 or even early 2018." 

    The focus in the market, he said, "remains short term more than at anytime Ive ever noticed in my more than 20 years experience in the industry." 

    Wilson later said the company expects to see more coal buying this fall, "but not at increased prices." 

    Officials declined to provide a production/sales forecast for 2017.
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