Subject: coal prices
note : this research is in sync with what the utilities and industry representatives were saying at the
wisconsin winter fuels meeting - - that coal prices are up over last year . lb
energy insight news for friday , october 19 , 2001
utilities should prepare for higher coal prices
coal prices in the united states were in a trough for so long - take your
pick , 10 , 15 , 20 years , according to some - that big users - read , power
producers - may have been lulled to sleep .
well , folks , the wakeup call is soon to be sounded , and , for some major
players , it may sound like a bugle blast in the ear .
while spot market prices took off as long ago as july 2000 , most major
producers were saved from swallowing the huge run - ups on the spot market
because utilities for the most part use long - term contracts to maintain a
hold on their fuel costs .
however , while the evidence is strictly anecdotal - no buyer wants to tip his
hand to the competition - this much is known : a substantial amount of contract
coal comes off pact in 2002 and 2003 .
and suppliers , who have toiled under the mantra that they would make up for
low prices by increasing productivity - for example , cutting labor costs - are
raring to get what they believe they deserve .
one big wild card in the upcoming battle for higher prices is how severe the
country ' s recession will be . obviously , a long - term downturn dampens energy
usage so utilities and merchant players don ' t need to replenish their coal
stocks . read the entire story at http : / / www . energyinsight . com .