RE: RE: ramp up For those of us who have gone through the 2008/2009 apocalypse holding metcoal stocks, one can't escape the sense of de javu with what's happening with Cline at the moment. It is now beyond just company specific. The demand side of the metcoal equation is now the 1 ton gorilla that will crush any and all suppliers, particularly those that are vulnerable and not nibble enough to respond quickly to the coming storm.
As mentioned by others, WTN was in a similar situation to what CMK is in now. They were only producing PCI at that time and were heavily indebted with a huge capex overhang trying to bring Wolverine on line. IMO, the corporate governance wasn't much better. Sure everyone likes to talk warmly about Hogg, Calder, but the reality was the company was at the mercy of the Chairman Byrne and Treger of Audley Capital.
One can point to many factors that affect the metcoal space, such as the USD, but at the end of the day, the strength or weakness of the end demand is what matters. I do see a small comparable to what we experienced in 2008 that may be a positive sign. No one is talking about the price of oil. It is already down to $93 and perhaps if it continues to drop to the low-mid $80s , this may just be a huge stimulus for th eworld economy. As to whether Cline can survive this period to benefit from the eventual turnaround in metcoal demand? That's the bet. I'm hoping/betting that in 6 months time, it's de javu. GLTA