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Volume 9, No 125 June 27, 2007
Market Commentary On Quest to participate in bullish met market withEastern Kentucky coalWhat gives?Utilities still have plenty of coal, Quest Minerals & Mining is height is continuous, the Eimco 2810even though reports of production preparing to enter the metallurgical is capable of running up to 60,000cuts have persisted for months. At coal market by reopening its Lower tons of raw coal per month, thesome point, one would think, X coal Cedar Grove mine located at Slater's company said. glut - Y production cuts would = Ztighter inventories. And Mrs. Hopper, Branch, KY, the company said. Tests on the Lower Cedar Grovemy third grade arithmetic teacher, Quest pointed to samples, which it seam coal have run in excess ofsaid I'd never amount to anything. said indicate that the Lower Cedar 13,000 Btu/lb., according to Quest."Production hasn't been cut a Grove seam will produce met blend While the coke button is "somewhatwhole lot," one senior Eastern coal coal. Quest's added that it has low," Quest believes that the highexecutive told Coal & Energy, identified "high demand for this type heating value and fluidity shouldglancing nervously in fear of a and quality of coal." permit shippers to blend the coal intolightning strike. "That's as loud as In anticipation of the reopening, high price orders to the internationalI'm going to get." Quest's wholly owned subsidiary, metallurgical market. It's never easy to shut in Gwenco, and its contract miner, "We are seeing an increase inproduction, and while some General Mining, have assembled and global demand for metallurgical.companies have done it, lots of folksare holding out, hoping for market moved equipment. Upon reopening, and high quality steam coal," Eugeneimprovement that would allow them Gwenco intends to employ an Eimco Chiaramonte, Jr., president of Quest,to continue mining. In that sense, all 2810 continuous miner to mine the said. "Both the Pond Creek andof the outside threats to production - 48- to 50-inch seam. Assuming Lower Cedar Grove mines fit thesevalley fill lawsuits, safety mandates, Gwenco is able to employ a doubleetcetera - might be having an shift operation and that the seam Continued on page 2unanticipated impact. Producersmight be holding off on some Prompt Month for CSX < 1% & NYMEX Coalsproduction cuts until they see $50.00whether some mines fall to one of $48.00these threats. $46.00It's also true that the mine closures $44.00that have occurred have helped to $42.00ease the labor shortage, which maybe $40.00$38.00has tended to keep experienced $36.00miners from jumping ship, thus $34.00 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 77 7 7 7 7 7 7 7 7helping operators to become more 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 02 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 22 2 2 2 2 2 2 2 2/ / / / / / / / / / / / / / / / / / / / // / / / / / / / /7 8 9 0 1 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 51 2 3 4 5 6 7 8 9productive. Certainly, some Central / / / / / / / / /2 2 2 3 3 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2/ / / / / / / / / / / / / / / / / / / / /6 6 6 6 6 6 6 6 65 5 5 5 5 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6Appalachian producers surprised theindustry during the first quarter by NYMEX Prompt Month CSX < 1% Prompt Monthcutting costs, in part because ofimproved productivity. Prompt Month for PRB 8800 and PRB 8400 CoalsThat maybe has prevented the mine $11.00closures that have occurred from $10.00having quite as much impact on $9.00production as would otherwise have $8.00been the case.For all of that, expectations of a $7.00stronger market have increased $6.00considerably in recent weeks, $5.00 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 77 7 7 7 7 7 7 7 70 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0whether because of the 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 02 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 22 2 2 2 2 2 2 2 2/ / / / / / / / / / / / / / / / / / / / // / / / / / / / /7 8 9 0 1 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 51 2 3 4 5 6 7 8 9/ / / / / / / / /2 2 2 3 3 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2aforementioned supply threats, the / / / / / / / / / / / / / / / / / / / / /6 6 6 6 6 6 6 6 65 5 5 5 5 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6Continued on page 2 PRB8800 Prompt Month PRB8400 Prompt MonthNo duplication of this report in whole or part is permitted without express written consent of Energy Publishing, LLC.Page 2 Coal & Energy Price Report June 27, 2007
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