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Corsa jumps on the met coal train

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World Coal,

Corsa Coal expects to ship 0.25 million short t of metallurgical coal in 4Q16 from its Northern Appalachian (NAPP) operations, according to a recent update to its quarterly production guidance. Previously, the company has forecast sales of 0.225 – 0.275 million short t.

The company said it was “taking steps to increase sales volumes of metallurgical coal” in response to the current strength in prices for the steelmaking commodity on international markets. It also confirmed that its expects to realise prices of about US$100 per short t FOB mine in 4Q16 – a 44% improvement on the average price realised in 3Q16.

Looking ahead, Corsa said it expected to switch focus from domestic to international sales, resulting in a further improvement in realised prices. Lower-priced legacy domestic contracts comprised around 45% of the company’s 4Q16 sales, muting the impact of price rises.

“For 2017, Corsa expects the vast majority of its sales to be with international customers, given the higher expected price realisations as compared to domestic sales,” the company said. “Corsa has committed approximately 70% of its volumes in Q1 2017 at prices that reflect current market conditions.”

The company also said it would seek to further increase sales volumes by purchasing and reselling metallurgical coal produced by third partiers in NAPP and Central Appalachia, as well as through sales from Corsa’s Acosta underground mine in Pennsylvania. The Acosta mine is expected to start production in 2Q17.

Corsa is also taking steps to restart production at the Schade Creek preparation plant and loadout facility, which is served by Norfolk Southern. The plan is expected to be operational in 1Q17.

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