Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Jim Rollyson, Raymond James.
Jim Rollyson – Raymond James
Good morning, gentlemen.
Michael Quillen
Good morning, Jim.
Jim Rollyson – Raymond James
Mike, you talked a little bit about kind of a lot of changes going on right now. Can you maybe just give us your thoughts on what you're seeing in terms of, at this stage, pricing for domestic met coal? It seems like over the calls here in the last couple weeks we've heard a lot of talk kind of low-vol prices in the higher-end of the 200 scale, $200 scale and varying qualities of high-vol kind of in the lower-end of the $200 range scale. Is that generally consistent with what you guys are seeing?
Michael Quillen
Yes, the domestic business finished up strong and those are the ranges. When you look at our average around 270, again, we've got probably the most range of qualities of anybody out there. And when the low-vol guys have come out and I guess, Baxter [ph] will report tomorrow, that will be more along the high-vol line. And then you had I think Arch [ph] reported with a little bit different product. So the numbers are ranging, bearing on the products between not really low-200s but say mid-200s, 230s up to in excess of 300 for other products and so (inaudible) the domestic business came out very well. The thing that I would like to add, and I'm sure it will be a question forthcoming is that what do we see in international business? We're one event away from the market turning back around from some of the doom and gloom that's being predicted right now. There just is still not any substantial increase, and in this environment, may be a decrease in sources of high quality met coal. So one event, this is very similar to where we were in 2007 when we got all projecting '07 one will be that good and the first half was fairly mild. And then it took off because of snows and floods. So we're – it's a fragile supply-demand environment right now, so, we're not at all in the camp that this is going to be some kind of economic disaster for 2009 because of where the steel is.
The other thing and I'm really going probably into some questions that are forthcoming, but the other thing is that when you look at the reductions in the blast furnaces of 20% and you equate that back to impact on met coal to coke, again, iron ore or coke that's direct infusion in the blast furnace are mathematically going to be adjusted, but how your met coal ties into coke and where they get that coke from will have a big part to do in that. We don't think, even though I think Kevin gave a number there that was the mathematical reduction of maybe 2 million tons mathematically, we don't even think it's going to be that high in the fourth quarter and are again in the first quarter. So we don't ever get as high as everybody gets or as low as everybody gets, but we're pretty (inaudible) optimistic about the way things will shake out for '09.
- To read the full transcript on Seeking Alpha, click here »
