Patriot Coal (NYSE: PCX) said May 14 that based on recent developments involving the potential default by a key customer, it is revising its anticipated sales volume and average selling prices from data that it had given on May 8.
The current spot market price for this quality of high-vol coal is about $25 to $30 per ton lower than the original contracted price with that customer. The new projection for average selling price for Patriot’s currently-priced Appalachia met coal is $142/ton for 3.9 million tons to be sold in the final three quarters of this year. The new projection for 2013 is an average of $122/ton for 0.2 million tons of met coal sold and priced. Note that the met coal market is dominated by sales of one year or less in contract length, so it is common for little of that coal to be sold very far forward.
In its May 8 quarterly earnings statement, Patriot had given 4.9 million tons at an average of $138/ton as its projection for currently priced Appalachia met coal sales in the last three quarters of this year, and 0.4 million tons at $120/ton for 2013.
Patriot is a leading producer and marketer of coal in the eastern U.S., with 13 active mining complexes in Appalachia and the Illinois Basin. Its met coal operations are in southern West Virginia. The company ships to domestic and international electricity generators, industrial users and met coal customers, and controls about 1.9 billion tons of proven and probable coal reserves.