Prices for steel-making coal, which has sustained miners as exports decline and power plants forsake the fuel, are down 22% since May as concerns about the global economy weigh on demand for steel.
That has U.S. miners treading water as their shares sink. Peabody Energy Corp. and Arch Coal Inc. are expanding production of metallurgical coal to offset falling prices, and both say those efforts will have little effect on earnings. The moves reflect the challenges facing an industry that has few options to drive growth in a world that's turning away from the fuel.
"If you're in the coal business, these are the times that try you," Randy Atkins, chairman of Ramaco Resources Inc., said on a conference call Wednesday. "The thermal coal market has pretty much dropped off the shelf. Even [metallurgical] coal benchmark prices that have held pretty steady at reasonably strong levels over the past year have now dropped."
Peabody, the biggest U.S. coal company, says the issues in the met coal market are broader. Prices have "eased largely due to the global concerns around trade and economic growth," chief executive Glenn Kellow said during the St. Louis company's second-quarter earnings call last month.
Business on 08/16/2019