In late summer and early fall, the Pennsylvania Anthracite Council and several individual producers of the hard coal in the northeastern part of the Keystone state said they fielded numerous inquiries from European buyers about the availability of coal.
Duane Feagley, the council’s executive director, said persistent upheaval in Ukraine is causing “a lot of tonnages to shift around,” with some European buyers looking to buy replacement tonnage from Pennsylvania.
Blaschak Coal President Greg Driscoll estimated his Pennsylvania-based anthracite company received more than two-dozen inquiries in a matter of a few weeks from parties in Ukraine and traders in other European countries. Many wanted thermal coal to burn in power plants, but some are seeking coal more suitable for use in the steelmaking process, such as anthracite coal, he said.
Adam Wilson, chairman of British-based Atlantic Coal, owner of the Stockton anthracite surface mine in Luzerne County, Pennsylvania, said commercially there are two leading factors creating “much better pricing and demand fundamentals” for anthracite coal. Stockton is operated by Coal Contractors Inc., an Atlantic subsidiary.
First, there has been “a noticeable improvement in U.S. steel production that is serving to drive demand and helping lift prices,” he said. Also, Atlantic has started to see the impact “of the removal from the market of the influencing factors of Ukranian anthracite supply and pricing benchmarks that in the past have served to depress prices paid by customers for anthracite not only in export markets but also in the U.S. and Canadian markets.”
Those factors, he added, “combine to create improved pricing and demand for the Pennsylvania anthracite industry, which we anticipate will be of positive benefits to our financial performance moving forward.”
Atlantic, which trimmed its operating loss to only $271,921 through the first six months of 2014, compared to $2.5 million for the same period of 2013, is optimistic the enhanced sales opportunities will bode well for the company in the remaining months of this year.
“As we proceed through the next reporting period,” Wilson said, “we are surrounded by a better set of market conditions for anthracite and a much improved mining and equipment fleet that, with the support of our operational team, is well-positioned to exploit exciting and expanding new customer demands.”
As the winter heating season approaches, Pennsylvania anthracite producers are preparing for one of their busiest times of the year. Home-heating sales account for a healthy chunk of business for companies like Blaschak, owned by Milestone Partners, a private equity firm in Radnor, Pennsylvania. Many homeowners in Pennsylvania and the northeastern U.S. still use anthracite coal to heat their dwellings during the cold winter months.