Arch Coal’s cash purchase of International Coal Group this week represents what is expected to be commonplace within the metallurgical coal scene in 2011: an M&A revival.
There is a real, physical demand for commodities and coking coal price is expected to jump by 36% in 2010, forecast analysts.
Coal stocks have been hit hard in this recession, given slumping electricity demand in the U.S. and the sharp drop-off of steel demand. For shareholders of Patriot Coal Corp (PCX: NYSE), the pain has been particularly acute. The stock lost 96 per cent of its value since last June's record highs. This year alone, Patriot's stock is down 41 per cent versus a 1 per cent decline by the Dow Jones U.S. Coal Index.
Thursday, May 5, 2011