Coal shares down on lower steel coal price talk
(Reuters) - Shares of U.S. coal producers that export steelmaking coal fell on Wednesday on speculation that the global benchmark price will be set lower, analysts said.
"There are bearish reports that (metallurgical) coal prices are going to be weak," said analyst Lucas Pipes, of Brean Murray Carret & Co. Metallurgical, or coking coal, is used by steelmakers.
The industry newsletter Inside Coal said suppliers were preparing for the quarterly global benchmark price - agreed between major Asian steelmakers and coal suppliers - to settle at around $185 per tonne, below the previous level of $225.
UBS Securities said a poll of clients put the average expected price at about $191 per tonne because of weaker demand for steel in Asia and increasing supplies of metallurgical coal from Australia.
The benchmark price, which does not include seaborne freight costs, has twice exceeded $300 - in 2008, before the recession, and in 2010, when flooding in Australia cut supplies. The price hit a low of $129 in 2009 at the height of the recession, according to the industry newsletter Coal & Energy Price Report.
In morning trading on the New York Stock Exchange, Alpha Natural Resources (ANR.N) shares fell 5.4 percent to $6.47, and Peabody Energy (BTU.N) dropped 2.5 percent lower to $21.72. Both companies produce large amounts of metallurgical coal.
(Reporting By Steve James; editing by John Wallace)
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