James River Coal in 2012 expects to ship at least 3.3 percent more coal from the Midwest and Central Appalachia than it did last year despite many railroad analysts’ expectations that coal shipments will fall this year.
The Richmond, Va.-based company forecasts shipments of Appalachian coal to rise at least 2.1 percent to 9.5 million tons and Midwest coal orders to increase 2.2 percent to 9.5 million tons, according to the Associated Press. CSX Transportation and Norfolk Southern serve the companies’ mines in Indiana, Kentucky and West Virginia.
James River lost $28.5 million in the fourth quarter after an income tax expense offset a coal shipment jump of 60 percent. The company's revenue doubled to $321.8 million in the same period.
Despite a poor overall market, the company is seeing strong demand from North American steel customers and improvement in European markets, according to a Seeking Alpha transcript of the company’s earnings call. But the company’s optimism is tempered by an increase in Canadian and Australian coal production, said Joseph Czul, president of Logan & Kanawha, a James River subsidiary.
“In particular, Indonesia, Mozambique and Mongolia are among suppliers we see as possible competitors. Finally, our business is closely tied to the global economic growth and that growth is still anemic and susceptible to falling off,” he said.
Railroad analysts expect coal shipments to suffer this year as more utilities switch to natural gas, Asian manufacturing slows and warmer-than-usual weather cuts into domestic demand. Coal shipments in the first eights weeks of 2012 were down 5.8 percent year-over-year, according to the Association of American Railroads.