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 Post subject: King Coal Makes Cameo in Area as Anthracite Sales Rebound
PostPosted: Sun Aug 08, 2010 8:18 pm 
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Joined: Thu Apr 02, 2009 7:16 pm
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Location: Anthracite Region of PA
King Coal makes cameo in area as anthracite sales rebound
Published: August 8, 2010

Kobin Coal Corp. recently shipped 20 tons of anthracite to Europe from the Philadelphia area.

"In 2009, we had zero tons of exports," said Daniel Nester, vice president of Kobin, a coal brokerage based in Long Island, N.Y., with an office in Hazleton. "There's a great deal of potential."

Anthracite exports have staged a strong rebound after overseas demand flattened in 2009 from the international economic crisis and industrial slump.

"Demand certainly is very strong," said Joseph Frank, president of Centralia Coal Sales Co. in Wilkes-Barre, the region's largest anthracite supplier. "It is up dramatically over last year."

Anthracite is a valuable raw material for metallurgical uses, especially steelmaking, because it has a high carbon content and low concentrations of sulfur and gas.

U.S. metallurgical coal exports, which include anthracite and some bituminous coal, more than doubled in value to $3.2 billion through May, compared to the same 2009 period, U.S. Department of Commerce data show.

China, which has overtaken the United States as the world's top energy consumer, is a major importer of metallurgical coal. China imported 920,016 tons of U.S. metallurgical coal in the first quarter, up 42 percent from the fourth quarter of 2009, the department reported.

"Anthracite has gone through the roof in the last six months," said Wayne Michel, president of the Reading and Northern Railroad Co., a Schuylkill County short-line operation that transported more than 100 carloads of coal for export over Memorial Day weekend.

"A number of factors are coming together now to increase demand for U.S. anthracite," said Bill Meister, a vice president at Marston & Marston, a mining consulting firm near St. Louis. "Vietnam has been the primary supplier of anthracite to China, and Vietnam is talking about reducing or eliminating exports of anthracite because they want to retain it for their own production of electricity."

The surge in overseas anthracite demand started in the spring as China stepped up steel production, Mr. Frank said.

"Although China has anthracite, they are not producing it in sufficient quantities to satisfy their demand," he said.

Anthracite production through the first half of 2010 was down 3 percent from the same period in 2009. But output over the 52 weeks ending July 10 was 7 percent higher than the preceding period and totaled 1.9 million tons, according to the U.S. Department of Energy. Most of the production is concentrated in Schuylkill and Northumberland counties and near Hazleton, where Jeddo Coal Co., of Wilkes-Barre, has a surface-mine operation.

Only 458 people worked in the anthracite industry in 2007, according to the most-recent Census Bureau data. Industry employment peaked at about 100,000 in the early 1940s.

The last spike in foreign anthracite demand occurred in 2004, Mr. Frank said.

"Export markets are very tricky in that they come and they go," he said. "It's a market that's somewhat erratic."

Nevertheless, Mr. Nester sees a big turnaround in overseas sales. Kobin Coal will make another overseas shipment in August and exports will make up about 35 percent of Kobin's sales this year, he projects.

"We're optimistic," he said. "As long as the economy improves, our export outlook will improve."

Scott K
"Watch Your Top"

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