CWall

Missed Steel Rally? Massey is Purest Play on Metallurgical Coal

Met coal prices have been reset at the high end of the expected range: over $300 per ton. MEE has the highest percentage of metalurgical coal in its production of any of the US majors that I am aware of. But it is only 25%, which does not make it a "pure play". Further, MEE has numerous contracts in place to provide coal at the old prices. I agree that MEE will benefit from the increase in met coal prices. But that benefit will seep gradually onto the income statement over the next three years; there will not be a significant, immediate step up as would be the case if all its production were met coal and if it sold strictly at spot prices.