U.S. coking coal miners seen slow to respond to price rally – by Nicole Mordant (Reuters U.S. – November 2, 2016)

http://www.reuters.com/

U.S. miners of steel-making coal will be slow to lift output, even with prices tripling so far this year, as they need to renew operations shuttered during a five-year price collapse that pushed many into bankruptcy court, industry watchers say.

Delays in bringing on new supplies of steel-making coal, also known as metallurgical or coking coal, are expected to help keep global prices higher for longer. With operating costs higher than their Australian peers, U.S. miners typically bring supply online when prices rise and are cut back when they fall.

“Given how decimated the whole industry has gotten over the last two to three years, there is just not a lot of ready-use production that could come online,” said Jeremy Sussman, analyst at Clarksons Platou Securities in New York.

Analysts and executives said many idled mines would need capital infusions for equipment purchases and mine development, such as waste rock and soil removal that were deferred before they were shut down.

The surviving U.S. miners, some of which are only now emerging from bankruptcy, are expected to be cautious in making any big financial outlays. Prices for Australian premium hard coking coal have surged from around $70 a tonne in February to more than $250.

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