Patriot Coal To Close Logan County Operations
News: US mining company Patriot Coal has announced that it will be closing its Logan County co al operations in West Virginia due to falling coal demand and low commodity prices, PR Newswire reports. The closure, which will see the company reduce its thermal coal production by around 2mn tonnes per year, will affect around 250 employees. The company stated that the closure was a necessary step in bringing its production in - line with its expected sales.
BMI View: US c oal output will experience low growth over our forecast period, growing at an average of 0.6% per annum from 2013 to 2017, reaching 952mn tonnes (mnt) in 2017. We forecast US coal production and consumption will see gains in the coming quarters as coal has been able to recover some of its market share in electricity production as natural gas prices are recovering and as Asian import demands rise. However, rising exports are unlikely to fix the industry's medium-term woes. Stagnant medium-term domestic coal demand and an increasingly unfriendly regulatory environment will weigh on coal miners, leading to production cutbacks, asset sales and potential consolidation.