Declining coal prices expected to rebound 3% in 2nd quarter 2002, 9% in the next year, study shows

BOULDER, Colo., Jan. 31, 2002 – Recently declining coal prices are expected to rebound 3% in the second quarter and 9% in the next year, according to a new study.

“Today’s coal prices are nearing the lowest levels we expect to see in the next year or two,” according to Andy Roberts, a principal with Platts’ RDI Consulting unit, the company that prepared the study.

The second quarter increase will be due to a slight rebound in western sub-bituminous coal prices. Little movement in NYMEX-quality and already high Northern Appalachia prices is expected, as indicated by the RDI Coal Price Index, upon which the Platts forecast is based.

The one-year forward Index is forecast to recover further. “Eastern coal supplies will remain tight while a return to normal weather and a gradually improving, but still weak economy, modestly stimulate demand,” Roberts said. “These price stimuli will overcome the effects of continued low natural gas prices and higher coal inventory levels.”

Platts’ RDI Consulting prepares the Coal Price Index every quarter as part of its Coal Market Research subscription service. The Index is a national aggregate of changes in key forecasted Free-On-Board (FOB) mine coal prices of coal sold for delivery to customers on both new contract and spot terms.

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