Lots of bids, no wonder whyCoal prive getting very strong
Also In the News (C-TEK) Teck Cominco Ltd
The Globe and Mail reports in its Monday edition that analysts are expecting coal prices to soar. The Globe's Tip Sheet column reports that Canaccord Capital says contract coal prices could increase 50 per cent from a year ago to between $80 (U.S.) and $90 (U.S.) a tonne. "There is some speculation that negotiations could be over quickly as steel mills rush to lock in supply for the 2005 coal year," Canaccord said. The price of thermal coal has traded at more than $60 (U.S.) a tonne and more recently in the $50-(U.S.)-plus range; two years ago it was only $22 (U.S.). The unit price of Fording Canadian Coal Trust has climbed to $75.60 (Canadian) from less than $60 (Canadian) in August. Canaccord estimates the distributions on the units could increase to $9 (Canadian) in 2005, up from an earlier forecast of $6.70 (Canadian). Its target price on the units is $77 (Canadian). Some analysts caution that based on a long-term average coal price, the units are expensive. CIBC World Markets targets the units at $52 (Canadian), while UBS Securities Canada pegs them at $91.25 (Canadian). Teck Cominco is also benefiting from higher prices for commodities.