Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 18, 1993 TAG: 9307180199
SECTION: VIRGINIA PAGE: B-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: HUNTINGTON, W.VA. LENGTH: Medium
Coal that sold in January at $21 to $22 a ton, barely break-even for some producers, now is fetching $26 to $27 a ton, said Rafael Villagran, a financial analyst for Shearson Lehman Brothers Inc.
And prices could keep rising.
"If coal buyers get concerned . . . the sky is the limit," Villagran said. "Utilities aren't going to tell you how bad it is. But right now, we're looking at lean inventories going into the peak of the [summer] cooling season."
The United Mine Workers of America caused scarcely a ripple May 10 when it announced it was launching a strike against selected members of the Bituminous Coal Operators Association, which represents the nation's largest coal producers.
The struck companies noted the union represents only about 30 percent of the nation's coal production.
Although coal is used to produce about 55 percent of the nation's electricity, utilities also pointed out that coal stockpiles were at an all-time high after a relatively mild winter.
The UMW has gradually escalated its strike and now has about 17,000 members on strike in seven states.
At the same time, hotter-than-usual weather in June and July helped eliminate much of those stockpiles as utilities kept up with increased demand.
From June 6 through 19, the nation's electrical output was up 2.9 percent from the same period last year, according to John Grasser, spokesman for the National Coal Association.
Generation was up 6.4 percent over the previous year's level by June 24, and it was up 7.9 percent by July 4, Grasser said.
Figures for the even hotter two weeks that followed are not yet available.
East Coast utilities, looking for more coal, found many of their normal Appalachian and Midwestern suppliers shut down by the UMW strike.
When they began looking to the West, where the UMW's influence is much less, they found flooding on the upper Mississippi River has been interfering with rail shipments.
Furthermore, the strike has forced major coal terminals in St. Louis to close for lack of coal from the East.
Meanwhile, one of the companies struck by the UMW, No. 2 producer CONSOL Inc., has reopened three mines it closed over the past year.
CONSOL cited market conditions when it ordered the closure of the Loveridge and Ireland mines in West Virginia and the Powhatan No. 4 mine in Ohio. As of last week, all three operations were producing again.
Eventually, as many as 700 laid-off union miners may be recalled at the three mines, the company said.
by CNB