Boston, MA 08/07/2014 (wallstreetpr) – Alpha Natural Resources, Inc. (NYSE:ANR) on August 6, 2014 reported a less than expected Q2 2014 loss because the cost of coal selling in eastern U.S. dropped down 6% from the Q1 2014. The shares of company climbed 8% in morning trading on NYSE on the same day.
In the meanwhile, Alpha Natural Resources, Inc. (NYSE:ANR) also slashed the outlook for annual shipping from Powder River Basin of Wyoming to 34-37 million tons. Also, the metallurgical coal shipment of ANR dropped to 4.5 million tons in Q2 2014, which ended on June 30, 2014.
Dropping Coal Selling Cost
Alpha Natural Resources, Inc. (NYSE:ANR), which is the U.S.’s third largest supplier of coal, said that the adjusted cost of coal sales arousing from eastern mines dropped to $62.01 per ton in comparison to $65.73 in the first quarter of the present fiscal. The eastern mines of ANR stretch from Appalachian in Pennsylvania, West Virginia and Kentucky. The drop in cost of coal enabled the company a tailwind of $45 million.
Weak Metallurgical Coal Prices Hitting Coal Miners
In the previous week, ANR had announced that it was planning to vacate 11 mines in West Virginia while also slashing around 1,100 jobs. This was an indication of poor state of Central Appalachian mines, which were, at some point of time, considered as “iconic.” These 11 mines were the producer of 4.2 million tons of not just metallurgical coal, but also thermal coal in first six months of the present year.
The coal miners in the U.S. were hit heavily because of weak prices of metallurgical coal, which not just pushed them towards idling of mines, but also cost cutting through jobs slashing.
Alpha Natural Resources, Inc. (NYSE:ANR), along with its staunch competitors, Peabody Energy Corporation (NYSE:BTU) as well as Arch Coal Inc (NYSE:ACI), are also facing hurt sales because of sub-standard rail services in Powder River Basin of Wyoming. This is also pushing them sideways from minting cash on uptick in electricity-generating coal demand.
