Alpha Lifts 2011 Coking Coal Forecast on Australian Floods

Source :Bloomberg, by Mario Parker - Jan 14, 2011

Alpha Natural Resources Inc., the third-largest U.S. coal producer, lifted its 2011 forecast for coking coal because Australia’s worst flooding in 50 years may increase demand.
The company expects to ship between 13 million and 14.5 million tons of metallurgical coal, used to forge steel, up from an earlier forecast of 11.5 million to 13.5 million tons shipped, according to a statement today from Abingdon, Virginia- based Alpha.
Queensland supplies 50 percent of the world’s seaborne metallurgical coal, or about 140 million metric tons a year, according to Bank of America Merrill Lynch. The flooding in that region has affected an area larger than Texas and California combined.
“As a leading supplier and exporter of metallurgical coal in the United States, Alpha expects to benefit from the combination of a strong seaborne metallurgical coal market and increased metallurgical shipments,” Chief Executive Officer Kevin Crutchfield said in the statement.
Alpha fell $2.57, or 4 percent, to $61.43 as of 9:37 a.m. on the New York Stock Exchange. The shares have risen 26 percent in the year before today.
The company also said it expects its cost of coal sales for 2010 in the Eastern U.S. to be higher than earlier forecast. Alpha forecast the cost of coal sales to be as much as 7.9 percent higher, at $61.50 per ton, from its earlier expectation of as low as $57.
Alpha blamed poor rail service, bad weather, delayed export shipments and geology problems at its Emerald Mine near Waynesburg, Pennsylvania, for the lower operating results during the fourth quarter.