Massey: Coal prices to stay high
Mining firm forecasts $63/ton coal this year and plans bigger capex.
By Dave Hannon -- Purchasing, 4/4/2008 5:07:00 PM
U.S. coal miner Massey Energy says coal prices will stay high enough to allow it to spend an extra $90 million on mining expansion this year, for a grand total of $310 million.
In a statement on its web site, Richmond, Va.-based Massey said it expects coal prices to average $61-$63/ton this year, up $8 from its prior forecast. Massey also boosted its 2009 forecast to $65-$74/ton from $57-$59 and jacked up its 2010 outlook by up to 24%.
“The extremely strong metallurgical coal market is the primary driver of our average price increase and is putting us on a path for another record-breaking year," said Massey CEO Don Blankenship. Energy Information Administration data says coal prices in all regions of the U.S. have increased significantly this year.
Massey’s forecast comes only two days after Lakshmi Mittal, CEO of ArcelorMittal, made a bold forecast that metallurgical coal prices would increase as much as 200% as demand for steel continues in global markets. South Korean steelmaker Posco this week said it may increase steel prices to offset increase coking coal costs.
See also: Coal prices concern steelmakers
See also: Coal market heats up on supply constraints
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