The company is reducing its expected metallurgical coal sales volume by approximately 1 million tons for 2014 in response to soft market conditions and concentrating its metallurgical production in our lowest-cost assets in Appalachia, he said.

“At Arch, we are taking proactive steps to manage our controllable costs and capital spending, reduce our cash outflows and preserve our liquidity,” he said.

“Based on the smooth start-up of the Leer longwall mine in the first quarter of 2014, we also are lowering our full year cost-per-ton guidance in Appalachia.

“At the same time, we are encouraged by the strengthening dynamics in the US thermal market.”

Positive electric generation and coal demand trends to date, declining US coal generator stockpiles and higher competing fuel prices should provide the catalyst for improvement in prices, the company said.o

During the first quarter of 2014, the Appalachian region, anchored by Arch’s Leer mine, delivered its strongest cost performance since 2011, prompting a reduction in our 2014 expected cost per ton for that region, according to Arch executive vice president Paul A. Lang.

“In addition, increased domestic thermal demand has resulted in an improving outlook for the West Elk mine in Colorado, prompting us to reduce our 2014 cost per ton for that region,” he said.

“In the Powder River Basin, we remain focused on achieving further improvement during 2014 as rail congestion eases and customer demand climbs.”

Compared with the fourth quarter of 2013, consolidated cash margin per ton declined in the first quarter of 2014, partly due to lower earned margins in the company's Bituminous Thermal segment.

Consolidated sales price per ton increased slightly over the same time period, but was offset by a 2% increase in consolidated cash cost per ton.