Galax, Virginia (Platts)--5Feb2013/1142 am EST/1642 GMT

Though lower than the 155.3 million short tons of thermal and metallurgical coal that the company sold in 2011, US producer Arch Coal Tuesday said expected its 2013 sales volume, at 133-144 million st, to be within range of 2012 sales.

In 2012, the St. Louis-based coal producer sold 140.7 million st, compared with 155.3 million st in 2011, it said in an earnings release. The current-year results include 36.1 million st sold in the fourth quarter. Average sales price for Q4 was $24.21/st and average cash cost was $19.44/st, for a cash margin per ton of $4.77, compared with $5.12/st in Q3.

Average 2012 sales price was $25.90/st, compared with $25.34/st in 2011, with cash cost lining up at $20.49 compared with $18.71/st, yielding cash margin per ton at $5.41 compared with $6.63.

Article continues below...

Sign up for Coal Outlook
	Coal Outlook is delivered daily and focuses on marine fuel prices and supply in major ports worldwide. It is essential reading for those who require accurate and timely data on this market sector.

Most of Arch's 2012 sales volume, as usual, was for the low-sulfur, subbituminous Powder River Basin coal mined in the western US, at 104.4 million st sold compared with 117.8 million st sold in 2011.

Arch has emphasized cost containment and production cuts in the PRB and Appalachian coal-producing region of the eastern US, but said Tuesday looking forward that it was renewing production growth at its bituminous coal mines in the western US, as well as at its metallurgical coal operations.

"Looking ahead, we are seeing signs that a coal market rebound is possible in the second half of 2013," said John Eaves, Arch president and CEO, in the earnings release.

Arch is "running our operations in a manner that will enable us to capitalize on the rebound as it occurs," Eaves said. "We are proactively responding to increased interest for Western bituminous coal after several years of weakness. We are also making progress in realigning our asset portfolio in Appalachia -- and expect our competitive position to be further enhanced as the Leer longwall starts up in the third quarter of 2013. In the Powder River Basin, we are continuing to focus on controlling costs as we manage our operations at significantly reduced production levels."

Arch sold 15.6 million st in 2012 from its western bituminous coal mines and has committed shipments of 13.1 million st of the coal for 2013, with 11.4 million st priced at $38.74/st.

At its Appalachian mines, Arch earned a cash margin of $15.60/st in 2012 compared with $23.72/st in 2011. "Thermal sales volumes declined nearly 7% in 2012 compared with 2011, while metallurgical sales were flat at 7.5 million tons," Arch said. "Sales price per ton decreased 2% over the same time period, driven by lower pricing on metallurgical sales. Cash costs per ton in 2012 increased 9.5% versus 2011, due to the impact of lower volume levels and mine closures, as well as a larger percentage of metallurgical coal in the company's regional volume mix."

For 2013, Arch is guiding sales volumes of 125-135 million st of thermal and 8-9 million st of met coal (See story, 1416 GMT).

For 2012, Arch reported an adjusted net loss of $76.7 million, or a loss of $0.36 per share, compared with net income of $205.2 million, or $1.07/share, in the prior year. Revenues totaled $4.2 billion in 2012 compared with $4.3 billion in the prior year.

--Steve Hooks, steve_hooks@platts.com
--Edited by Richard Rubin, richard_rubin@platts.com

Tweet