Patriot Coal Corporation (NYSE: PCX): fell by 2.78% or $-0.68/share in pre-market trading to $23.75. In the past year, the shares have traded as low as $9.76 and as high as $29.20. The shares are currently trading below the 200-day moving average but above the 50-day moving average. The stock may be range bound between these two levels where the 200-day moving average of $23.78 represents resistance and the 50-day moving average of $22.04 would be an area of support.
Forecasts continue to point to the sustainability of coal market globalization. Global seaborne demand for metallurgical coal is expected to increase more than 50 percent from about 250 million metric tonnes in 2010 to nearly 400 million tonnes by 2020. On the thermal side, global seaborne demand is expected to increase more than 30 percent from 2010 to 2020, to almost 1 billion tonnes. With supply constraints worldwide, Patriot believes U.S. metallurgical and thermal coal will increasingly be shipped overseas to satisfy the robust global demand. Eastern U.S. metallurgical and thermal coals, in particular, are well-positioned to participate in these growing export markets.
The Company believes the metallurgical coal market will remain tight. Patriot's response to these tight met markets is to continue its Met Build-Out project, increasing met production to at least 11 million tons by 2013. The Company is on track with this expansion plan, which includes acquiring equipment, finalizing permits, and hiring supervisors and hourly employees. The manageable size of each mine within the Met Build-Out is a distinct advantage, as it allows the Company to methodically increase production in line with sales commitments, and to benefit from its existing operational footprint.
In thermal markets, the Company expects to see continued opportunities for exports, as Asian markets build more coal-fueled power plants, putting more demand on global supply. The physical access of U.S. coals to the European thermal market, coupled with numerous coal quality alternatives, should make the U.S. a major ongoing participant in the increasingly global marketplace.
Patriot expects U.S. coal exports to approximate 100 million tons in 2011. The Company plans to export approximately 25 percent of its 2011 production, with exports anticipated to expand to more than 10 million tons, or 30 percent, in 2012.
Patriot Coal shares were trading down 3 percent at $23.8 before the bell. They closed at $24.43 on Monday on the New York Stock Exchange. For the latest updates PRESS CTR + D or visit Stock Market news Today
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