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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (239)	6/14/2001 1:59:16 PM
From: craig crawford	Respond to of 1643

safehaven.ca (nice chart for you to see what coal prices have done in the last few years) Revisiting the coal situation discussed here a couple months ago, today I talked to one of the major coal companies and it does not look good. Long-term contracts are being negotiated now and prices are definitely pointing to higher energy costs down the road. Last year average prices for coal were about $25 per ton. Contract prices being discussed now are hovering at the $40 per ton and higher. These are for long-term contracts often going out 2 or 3 years. Right now the coal industry in capacity constrained and is reluctant to spend capital to increase capacity since the industry has not been earning its costs of capital over the past several years. It sounds like these tight conditions will have to persist in order for the industry to make up for the long period of "just getting by." Additionally, since the industry sells a substantial amount of its coal under long-term contracts several suppliers are not fully reaping the benefits of higher coal prices.