Reuters reported that Patriot Coal Corporation is certain about a quick recovery in the coal markets, sending its shares up to a new high this year.
Mr Richard Whiting CEO of Patriot said that he expects domestic thermal coal demand to rise significantly over the next 6 to 9 months as natural gas pricing in 2010 could make utilities return to the normal level of coal fuelled plants to generate electricity.
He added that "This alone could result in a 20 million to 40 million tonnes increase in thermal coal demand in 2010. We believe the coal markets are at an inflection point poised to see a substantial improvement in demand in 2010 in both metallurgical and thermal coal. I am now more optimistic that the timeline is within our near term sight."
However, he expects the rebound in markets to coincide with hard-pressed supply, especially in Central Appalachia, as the Environment Protection Agency's delay in issuance of surface mining permits and the decision to review issued permits will lead to a meaningful reduction in tons.
He added that "We continue to see signs of strength in the metallurgical coal market, as domestic steel mill utilization have improved. We expect this market to continue to strengthen throughout 2010."
(Sourced from www.reuters.com)
