When Will Coal Price's Go Down???

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scotty
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Post by scotty » Thu. Dec. 04, 2008 7:53 am

with fuel oil down to around $2.00 a gal when will coal go down ??? I realize alot of dealers bought at a high price, but I feal it's a little inflated. Soon it's going to be cheaper to heat with oil again. at $300 a ton some places.

 
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Richard S.
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Post by Richard S. » Thu. Dec. 04, 2008 8:06 am

Well if the dealer bought at a high price because of shipping costs then it's not going to go down from them unless they can't sell it. Locally it has only gone up about $20 since this time last year.The price of the coal itself has not really seen that much of an increase and a price drop is very unlikely at least until spring. Having said that you will not see an increase either unless the cost of fuel goes above what it did in the Summer which is also unlikely. Keep in mind the cost of coal is about what it was 25 years ago adjusted for inflation.

Locally prices have risen steadily at the cost of inflation and it has not been subject to the wild fluctuations like other markets.

 
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gambler
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Post by gambler » Thu. Dec. 04, 2008 10:35 am

I doubt it will ever go down. When will your groceries and everything else that went up do to "cost of fuel" go down. I say none of it will ever return to the prices we had. Just keep that wallet open a little longer. The shippers now know how much raping you can take and they will cotinue to give it.

 
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bear creek burnout
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Post by bear creek burnout » Thu. Dec. 04, 2008 11:14 am

Keep in mind the cost of coal is about what it was 25 years ago adjusted for inflation.

Locally prices have risen steadily at the cost of inflation and it has not been subject to the wild fluctuations like other markets.
The dealers....the mom & pop guys who actually deliver our coal....are probably not making much more this year because their costs have risen as well. Their margins for profit are thin and fragile and we need them to stay fiscally healthy because I don't see many new upstarts in the coal delivery business.
Richard you know more about the retail sector of coal sales....have you seen an increase in the number of dealers in the past 10 years? I doubt it. If they can't make a decent living after expenses they close up and move on.
Honestly....if someone told you....or me....in August that the price of a barrel of oil would be below $46 the first week in December would you have believed them? It's down 67% in 13 weeks. Coal does not fluctuate in price that much in such a short period of time.


 
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UpStateMike
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Post by UpStateMike » Thu. Dec. 04, 2008 11:23 am

I think bagged coal demand is up in my area which will counteract any prices from the coal companies. That being said, it would not surprise me to see it falling over the 2009 Summer, which would be the best time to buy it anyways.

 
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Richard S.
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Post by Richard S. » Thu. Dec. 04, 2008 12:22 pm

gambler wrote: The shippers now know how much raping you can take and they will cotinue to give it.
Don't blame the shippers for the high cost of fuel during the summer, probably anyone making long hauls with coal is an independent because the big trucking companies won't touch it. Most of them make very little money when it's all said and done... been their done that as the saying goes. Many independents and smaller firms went out of business over the summer if that tells you anything.

 
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Richard S.
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Post by Richard S. » Thu. Dec. 04, 2008 12:25 pm

Richard you know more about the retail sector of coal sales....have you seen an increase in the number of dealers in the past 10 years? I doubt it. If they can't make a decent living after expenses they close up and move on.
Locally no, this is tough business to get to started in without a big investment and you have to be it in for the long haul if you expect to make any money. A new lift like the one I have is going to start around $35K, then you need the truck to pull it around and anything over 30K GVW gets expensive to purchase and run.

 
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Post by lincolnmania » Thu. Dec. 04, 2008 12:27 pm

i am forced to raise my shop rate at the beginning of 2009 cause of the increased cost of coal........20 bucks a ton here higher than 2007........30 bucks a ton more than 2006.......45 more a ton than 2005


 
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Richard S.
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Post by Richard S. » Thu. Dec. 04, 2008 12:31 pm

lincolnmania wrote:45 more a ton than 2005
Than 2000..... ;) or if you purchased in the spring $25 mare than in 2000 and my guess is if the fuel cost stay stable that will drop about $10 in the spring to $35 more than in 2000. Again it's right inline with inflation practically, might be a little higher this year.

 
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gambler
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Post by gambler » Thu. Dec. 04, 2008 12:39 pm

Richard S. wrote:
gambler wrote: The shippers now know how much raping you can take and they will cotinue to give it.
Don't blame the shippers for the high cost of fuel during the summer, probably anyone making long hauls with coal is an independent because the big trucking companies won't touch it. Most of them make very little money when it's all said and done... been their done that as the saying goes. Many independents and smaller firms went out of business over the summer if that tells you anything.
I don't blame the shippers because they are there to make money. But it always seems they are eager to up the shipping costs because they need to make money but when the price of fuel gets cut in half they don't seem quite as eager to lower the shipping costs therefore they are making a lot more money. I have a brother inlaw that works finding haulers for his company's product and he told me that even with the price of fuel coming down the cost of shipping has remained where it was and in some cases has still risen. It just seems they have made this "fuel charge" work in their favor.

 
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gambler
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Post by gambler » Thu. Dec. 04, 2008 12:54 pm

My coal supplier raised his price this year $50 a ton (bulk) Lets say he gets on average 24 ton a load. That is $1200 a load. Granted the coal costs him a little more this year.

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