October 20, 2011 / 10:20 AM / 8 years ago

UPDATE 3-Patriot Coal sees higher met coal prices, shares up

* Q3 rev $589.4 mln vs est $592.4 mln

* Expects Q4 sales volume of 8-8.3 million tons

* Sees improved production in the fourth quarter

* Shares up 4 pct before the bell

Oct 20 (Reuters) - Patriot Coal Corp , which is boosting metallurgical coal production, said it sees higher pricing for the steel-making coal amid strong demand from countries such as Brazil and India, sending the U.S. coal miner’s shares up 4 percent before the bell.

Coal prices have been stable at over $100 a ton for most of the past year, spiking only briefly after the Queensland floods and the Japanese tsunami.

Near-term concerns about a slowing global growth will not affect the metallurgical coal market, given steel production and demand in a number of countries, the company said in a statement.

The thermal coal-focused has been boosting production of the lucrative metallurgical coal to tap into the strong demand in Asian markets.

The coal market has appeared immune to volatility in recent months as fears about the global economy and the euro zone have sharply disrupted prices in other markets.

St Louis, Missouri-based Patriot said it sees improved production in the fourth quarter and lower costs per ton.

The company expects fourth-quarter cost per ton in the eastern U.S. region of Appalachia to be $72-$75, lower than the $79.10 in the third quarter.

“Looking forward, we are expecting improved production in the fourth quarter. There are no scheduled longwall moves, and the increased production should lead to lower cost per ton,” Patriot said in the statement.

Patriot expects fourth-quarter sales volume to be 8-8.3 million tons, including met coal sales of about 2 million tons.

Third-quarter sales were 7.4 million tons, including 1.8 million tons of met coal.

Third-quarter production was hit in the eastern region of Appalachia due to geological issues at two mines and the early closure of another mine. The company said the two mines had resumed normal production by end-September.

Patriot’s third-quarter loss, on an adjusted basis, came in two cents lower than expected, according to Thomson Reuters I/B/E/S. Analysts expected the company to post a loss of 62 cents a share, on revenue of $592.4 million.

Patriot Coal shares, which have lost more than a half of their value till date, were trading up 4 percent at $9.62 before the bell. They closed at $9.22 on the New York Stock Exchange on Wednesday.

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