Walter Energy

Met coal producers are the worst hit in the current energy environment. Based on our analysis so far, we can conclude that the higher the revenue share of met coal, the steeper the stock prices fell in 2014.

Analysts’ ratings As of October 27, 2017, of the nine analysts covering Arch Coal (ARCH) stock, eight (89%) recommended “buy” or “strong buy,” and one (11%) recommended “hold.” There were no “sell” or “strong sell” ratings. Arch Coal’s price target Arch Coal’s 12-month target price was $94.88 as of October 27, 2017. The target price indicates an upside […]

Of the eight analysts covering Peabody Energy (BTU), six (or 75.0%) have given the company a “buy” rating, and two (or 25.0%) have given it a “hold.”

On October 5, 2016, Arch Coal (ARCH) emerged from bankruptcy through successful financial restructuring.

Factors that led to Arch Coal’s bankruptcy include its financial leverage, a weak export market, inexpensive natural gas prices, and increased environmental scrutiny.

Highly leveraged players such as Alpha Natural Resources (ANR) have limited ability to issue new debt if they run out of resources.

Walter Energy was the biggest casualty of the day in the coal sector, with a whopping 17% drop in share price to 38 cents.

The company showed remarkable cost performance at the Appalachian segment, and the cash costs in this segment were lowest in the last four years.

Metallurgical coal (or met coal) is used to make coke for iron and steel as well as foundries. Most metallurgical coal produced in the US is exported.

Last week, Alpha Natural Resources (ANR) and Arch Coal (ACI) were reduced to penny stock status. Alpha ended the week at $0.95 and Arch Coal at $0.88.

Coke is used in the iron making process, which in turn is used in the steelmaking process. SunCoke Energy produced 4.2 million tons of coke in 2013.

Iron ore, steel scrap, and met coal are the main raw materials for steelmaking. SunCoke converts met coal to coke by driving out its impurities.

SunCoke Energy (SXC) is the largest independent manufacturer of coke, which is used in steelmaking. It runs five coke making plants in the United States.

There’s mistrust in the global commodity markets. From crude oil to met coal and iron ore, producers haven’t cut production. They’re waiting for others to do it first.

Of the 2.9 million tons of coal the company sold in 2Q14, 2.7 million tons, or 92%, was metallurgical coal.

The Appalachian coal region is the oldest coal producing region in the U.S.—geologically and commercially. The Appalachian’s coal seams are ~300 million years old. They’re the oldest coal seams in the U.S. Appalachian coal fueled most of the Industrial Revolution after the Civil War in the 19th Century.

Self-described as the world’s largest private-sector coal company, Peabody Energy (BTU) runs coal operations in the United States and Australia that serve customers in 25 countries.

Coal mining in the U.S. can be segregated into three main areas: Appalachia, Interior, and West.

Underground mining is more expensive because it’s more capital intensive. Coal companies have to drill more, and use more expensive and complicated machines.