Peter Koven, National Post, Sept. 22, 2011
For anyone counting on fastgrowing Asian economies to prop up the West, this is not good news.
On Wednesday, Virginia-based Alpha Natural Resources Inc. slashed its 2011 guidance for metallurgical coal shipments by as much as 12%. It noted surprisingly weak customer demand in Asia as one of the key factors.
Alpha shares fell 4.6% on the news, and shares of other metallurgical coal producers fell including Canadian miners Teck Resources Ltd., down 2%, and Grande Cache Coal Corp., off 0.8%.
"This market commentary is expected to overhang the entire met coal sector," TD Newcrest analyst Greg Barnes wrote in a note. He did point out that Alpha's coal is lower quality than Teck's, so it is hard to make a direct comparison.
Meredith Bandy, an analyst at BMO Capital Markets, wrote that most of Alpha's shipments are to India rather than China, which is the most important Asian customer.
Adding to the woes in the coal industry on Wednesday is news out of U.S. giant Walter Energy Inc., which reduced its guidance because of bad weather in Northeast British Columbia. Its shares fell 8.8%.
