A hydraulic excavator loads a haul truck at Atlantic Coal’s Stockton mine.

Atlantic Coal, owner of an anthracite surface mine in Pennsylvania, believes worldwide prices for metallurgical quality coal used in steelmaking, including anthracite, may have bottomed out and are poised for a move upward.

In a report released in June, the British-based company said that despite continuing issues relating to overcapacity and significant cost pressures throughout the global steel industry, total global demand for steel continues to grow, leading to higher demand for the kind of met quality coal Atlantic produces at its Stockton mine in Luzerne County.

Between June and last August, for instance, Atlantic said the Australian hard coking coal price fell to below $140/ton, its lowest level since 2010. In March, Goldman Sachs cut its met coal price estimates for this coming year to $141/metric ton (mt) from $150/mt, and lowered projections for next year and 2016, citing oversupply and sluggish Chinese demand growth, Atlantic said.

Conversely, Atlantic said the global steel industry is expected to make a recovery in 2014, led by a rebound of production in Europe and the rest of the world, offsetting the Chinese slowdown.

“Most importantly,” Atlantic noted, “while China and other Asian markets continue to increase steel production, demand for metallurgical quality coal is expected to remain strong. The brighter global economic outlook, with developed countries emerging more strongly than expected from the current downturn, can be expected to support consistent demand and, possibly, to drive demand more strongly than currently expected.”

Anthracite coal is the “most versatile” and high-quality met coal, Atlantic said, and represents just 1% of the world’s coal reserves. “There are few new high-quality deposits in mining-friendly jurisdictions, which suggests a future supply imbalance supporting future high prices.”

As a result, Atlantic said it is confident that demand for its products will continue across key domestic markets and anticipates a rebound in sales prices in the near term.

At Stockton, the company said it has been able “to maintain total revenues in spite of coal selling for an average of $128/ton.” In its drive to make the mine profitable, Atlantic said it has been successful in reducing the mine’s production costs to $105/ton in 2013 from $112/ton in 2012.

Last year, Atlantic exercised a 20-year lease on the Pott & Bannon property in Schuylkill County, Pennsylvania, containing an estimated 13.6 million tons of run-of-mine coal, equating to approximately 4.1 million tons of washed, saleable coal. Atlantic said those reserves are roughly three times the reserves it has at Stockton and it is actively planning a new mine.

Stockton is operated by Coal Contractors Inc., an Atlantic subsidiary. Atlantic said the operational performance of the mine was “commendable, with our management team again focused on working efficiencies in the year under review, in the face of considerable external pricing pressures.”

During the brutal winter of 2013-2014, the company experienced “some of the most difficult working conditions ever faced at Stockton, with the ‘polar vortex’ delivering extreme cold temperatures that made working conditions for our employees on site the most challenging ever,” the company said.

Stockton produced 35,757 tons in the first three months of 2014, compared to 41,555 tons a year ago. For all of 2013, the mine’s output was 151,265 tons, down from 161,183 tons in 2012.