Prices for metallurgical coal, a key input in steel production, jumped after the terrible explosion in the West Virginia mine forced Massey Energy Company to squeeze an already tight market for the commodity.
The Upper Big Branch mine disaster takes supply off the market at time of strong Asian demand for the higher-quality coal and a rebound in steel production in the U.S., Brazil and Europe.
Massey was scheduled to ship 1.6 million tons of metallurgical coal from the Upper Big Branch mine this year, which is about 3% of total U.S. production last year. Massey said it will increase production at other mines, but doubts it will be able to replace all of the lost production from Upper Big Branch this year. The company sis not positive when the mine might reopen.
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