Shares of Patriot Coal Corp. tumbled 11 percent this morning after the company slashed its 2012 forecast for metallurgical coal by a million tons. It revised the forecast due to the potential default of a key customer.
The Creve Coeur-based company, which did not identify the customer, is now expecting Appalachian met coal production to be 3.9 million tons for the last nine months of this year and 0.2 million tons in 2013.
Last week, it projected 4.9 million in production in the last nine months of 2012, which represented a quarter of Patriot's total coal production forecast at the time, and only 0.4 million tons in 2013.
Met coal is used to make steel and sells at a higher price than coal used to fuel power stations.
As of 11:10 a.m., Patriot shares were trading at $4.28, down 55 cents from Monday's close.