June 19 (Bloomberg) -- Declining metallurgical-coal prices, which are seen hitting a three-year low amid rising Australian exports to China, will lead U.S. producers to shut more mines, according to Alpha Natural Resources Inc.
“I wouldn’t be a bit surprised if we looked at changes in the back half of the year,” Alpha Chairman and Chief Executive Officer Kevin Crutchfield said in an interview yesterday at Bloomberg’s New York headquarters. “It’s going to affect everyone.”
Alpha, the country’s biggest supplier of the steelmaking ingredient, boosted its metallurgical-coal output in 2011 when it acquired Massey Energy Co. for $6.67 billion. Since then it has cut about half of its production in the central Appalachian region, Crutchfield said in February.
Earlier this month, the Bristol, Virginia-based company announced the closing of an unprofitable West Virginia mine. In September, Alpha said it would shut eight mines, cutting 16 million tons of output. The company also produces thermal coal, the price of which has declined amid mild weather and as some power utilities switch to natural gas.
The metallurgical-coal benchmark contract for the third quarter may be settled at $153 a ton, according to the average of three analysts’ estimates compiled by Bloomberg. That would be the lowest quarterly price since the first quarter of 2010, according to data compiled by Bloomberg.
Alpha plans to ship 81 million to 92 million tons of coal this year, including 19 million to 22 million tons of metallurgical coal, which typically fetches a higher price than thermal.
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