UPDATE 1-Walter Energy sees strong demand for steel-making coal
* Says sales are outpacing 2008 highs
* Says getting additional orders from customers
* Says to start longwall mining in December
By Antonita Madonna Devotta
BANGALORE, Oct 21 (Reuters) - Walter Energy Inc (WLT.N) said its year-to-date sales volumes are exceeding the record levels reached in 2008, and demand for steelmaking coal has shown no signs of reduction.
The coal miner expects to supply about 6.4 million tons of hard coking coal in 2009 compared with 5.8 million tons sold in 2008.
"In short we returned to a situation where our sales are limited not by customer demand, but by our production and inventory," Chief Executive Victor Patrick said on a conference call with analysts.
Walter, which posted a strong third-quarter profit, expects to sell about 1.6 million to 1.7 million tons of coking coal in the fourth-quarter, whereas production may range between 1.4 million and 1.5 million tons only. [ID:nBNG527363]
The company said it expects to begin longwall mining in one of its mines by mid-December and will likely hit full capacity by January.
Longwall mining is a form of underground coal mining where a 250 to 400 meters long wall of coal is mined in a single slice.
"It is pretty clear that business is obviously getting better for Walter... they are in a dramatically different situation than they were in about 3 to 6 months ago," analyst Daniel Mannes of Avondale Partners LLC said.
Earlier this year, Walter had closed its loss-making home building and finance subsidiary to focus on natural resources.
"The company's comments were bullish. This is a situation where the expectations were quite high...When you look at the performance of the stock, I think that bears it out," the analyst said.
Shares of the company, which were down 2 percent in early trade, are trading flat at $65.56 Wednesday afternoon on the New York Stock Exchange. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Pradeep Kurup)
