...Coal producers are scaling back production due to the sharp economic contraction, which has resulted in lower prices for natural gas, expectations for lower power demand, and sharply lower global demand for metallurgical coal. While spot prices are trending down, most of 2009's and a significant portion of 2010's steam volume has been priced in the favorable environment of late 2007/early 2008. Regulatory uncertainty about carbon emissions has stalled plans for many new coal plant builds, which will cap domestic demand in the medium term aside from those plants already under construction and scheduled to come into commercial operation in 2009-2012. Despite expectations for lower steel, consumable and energy prices, cost inflation is expected to persist due to labor and safety cost escalation. The industry's Rating Outlook is stable. Well-capitalized coal companies have solid liquidity and modest near-term debt maturities. Leverage should remain in the current range with scant new borrowing...
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