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Arch Coal reports $33.4 million in net income for Q4 2016

Wednesday, 08 February 2017 00:31:10 (GMT+3)   -   San Diego
SteelOrbis News

Arch Coal, Inc. today reported fourth quarter 2016 net income of $33.4 million. Revenues for the period totaled $575.7 million on 26.8 million tons of coal sales.
 
In the Metallurgical segment, the company shipped 1.7 million tons of coking coal at an average realized price of $75.36 per ton, a 30-percent increase over the average realized price in the prior quarter. Realizations benefited from higher pricing on new coking coal sales and stronger pricing on index-based contracts that shipped during the quarter.
 
The company noted that global metallurgical markets rebounded significantly in the latter part of 2016, with average pricing assessments off the East Coast of the United States increasing by 130 percent year-over-year for High-Vol A coking coal. Arch attributes the increase in metallurgical pricing to several developments, including production restrictions in China and the impact of a multi-year period of reduced global investment and supply rationalization.
 
Looking ahead, the company expects the market to address the undersupplied conditions of 2016, with new supply coming online in response to stronger price signals. With this supply response, Arch Coal expects the market to return to a healthy balance, with prices stabilizing at levels needed to keep the market in relative equilibrium.
 
The World Steel Association expects global demand for steel to increase by 0.5 percent in 2017, with more robust growth projected for key Atlantic Basin markets, including the United States, Europe and Brazil. Moreover, Arch is projecting additional strengthening in the seaborne market, with sizeable increases in demand for high-quality, imported coking coal in India, and a continuation of the conditions that bolstered China's participation in seaborne markets in the year's second half.

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