The Associated Press
Shares of several mining companies fell Monday after a government report showed some spot coal prices fell last week.
The Energy Department said that prices fell to $8.90 per 8,800 British thermal unit as of Friday from $10.50 per 8,800 BTU the previous week for coal produced in the Powder River Basin region of Wyoming.
Spot prices fell to $35.50 per 11,700 BTU as of Friday from $40.55 per 11,700 BTU in the Uinta Basin of Colorado the previous week. Prices remained unchanged for coal produced in the Appalachian and Illinois basins, the Energy Information Administration said.It's the latest sign of challenges that have faced the coal industry during the first quarter. A mild winter has kept demand weak for electricity, which has sent natural gas prices down sharply. Some power plants have switched to natural gas from coal to take advantage of the lower priced fuel for generating electricity. The situation isn't likely to change much unless there is a really hot summer that will increase demand for electricity to run air conditioners in homes and businesses, Johnson Rice & Co. analyst Bill Burns said. The coal industry's other primary customers are steel companies, which are coping with weaker demand, higher inventories and higher raw material costs. In addition, coal companies also have been hurt by concerns about slowing growth in China, the world's second-largest economy, Burns said. China is a huge importer of coal. By afternoon, shares of Alpha Natural Resources Inc. fell 44 cents, or 2.8 percent, to $15.54; Walter Energy Inc. dropped $1.36, or 2.2 percent, to $61.36; Arch Coal Inc. declined 31 cents, or 2.7 percent, to $11.35; Peabody Energy Corp. fell 31 cents to $29.88; Cliffs Natural Resources dropped 98 cents to $69.80 and James River Coal Co. declined 42 cents, or 7.1 percent, to $5.47.