NEW YORK (TheStreet) --Shares of Alpha Natural Resources Inc. (ANR) closed lower by 4.71% to $2.43 on heavy trading volume on Thursday, after the metallurgical coal price declined to a six year low, according to Doyle Trading Consultants LLC, Bloomberg reports.
The price of met coal dropped due to a global supply overload and a decline in demand out of China, Bloomberg added.
For the fourth quarter, Japanese steel mills and Australian coal producers agreed to a price of $119 per metric ton, which is down by a dollar from the third quarter, Doyle Trading said in a report issued today, Bloomberg noted.
With the met coal price settled where it is, a rebound in the sector, which is down 64% since it reached $330 per metric ton in 2011, is not likely, and U.S. coal producers will have to continue cutting costs and possibly slow down production at their less profitable mines, an analyst from Cowen & Co. said, Bloomberg reported.
Separately, TheStreet Ratings team rates ALPHA NATURAL RESOURCES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALPHA NATURAL RESOURCES INC (ANR) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, poor profit margins and generally high debt management risk."