Natural gas closed at $1.981 on Friday. That is cheaper, on a BTU basis, than Caentral Appalachian Coal (CAPP).
Dahlman Rose analyst Daniel Scott lowered his price targets on half a dozen coal stocks today to reflect stress test results.
In a note out today, he wrote that after publishing stress test results for thermal and met coal in the past three weeks, “one of the biggest takeaways was that open tonnage on the thermal side this year is unlikely to be contracted, while export comps will become more and more difficult as the year progresses. The good news is that we are seeing indications that met coal pricing may have hit an inflection point, and remain comfortable with our full-year average $220/mt FOB hard cokingcoal price deck….We have taken this opportunity to all but zero out unsold thermal tonnage in 2012, boost cost assumptions to near the top of guidance ranges, and lower our 2013 sales assumptions for both tonnage and realized price. We have lowered our price deck for the PRB to $13/ton next year for 8,800 Btu/lb coal, down from $14.50/ton previously. We are lowering our price deck for CAPP to $72/ton next year form $78/ton previously. We are assuming NAPP discounts of $8/ton off of CAPP pricing. Finally, we have assumed at or near the top of cost guidance for all companies based on lower volumes.”...MOREPreviously:
"It's Dark Days for Coal and Power Sectors" (KOL; BTU; ACI)
Natural Gas and its Threat to the U.S. Coal Industry (BTU; ACI; ANR; PCX)
The Economist:"the end of America’s coal era" and "Asian Coal Demand Buoys Peabody; Arch, Kinder Morgan Team On Exports" (BTU; ACI)
And many more, use the search blog box if interested.