Patriot shaves sales forecast on default worry

APPALACHIA-focused miner Patriot Coal has been forced to pull back on its projections in the region due to a possible customer default.
Patriot shaves sales forecast on default worry Patriot shaves sales forecast on default worry Patriot shaves sales forecast on default worry Patriot shaves sales forecast on default worry Patriot shaves sales forecast on default worry

A Patriot Coal operation

Donna Schmidt

The news comes just a week after it released its 2012 outlook for sales and production.

Patriot said the recent developments involving the “key customer”, which the producer did not identify, led it to estimate 3.9 million tons of Appalachian metallurgical coal at an average per-ton price of $US142.

It is versus the 4.9Mt at $138/t figures it provided in its May 8 guidance.

“The current spot market price for this quality of high-volatile coal is approximately $25 to $30 per ton lower than the original contracted price with that customer,” Patriot officials added.

BMO Capital Markets analyst Meredith Bandy told Bloomberg the contract was with an export trader, most likely for Asia or Europe.

“The market is understandably spooked by the cancellation,” she said, adding that BMO recommended using the weak point to buy met coal producers with higher-quality met coal.

Patriot, which trades on the New York Stock Exchange under the symbol PCX, suffered a nearly 19% fall in trading following the announcement and closed the day at $3.94.

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