DENVER - Shares of some of Massey Energy's competitors rose to 52-week highs Tuesday after the huge underground explosion that killed 25 miners and shut down production at one of the coal producer's West Virginia mines for what likely will be an extended period of time.
Massey Energy Co.'s shares fell more than 11 percent as plans were in the works to try to rescue four coal miners still missing in the aftermath of the Upper Big Branch mine explosion Monday, the worst U.S. mining disaster since 1984.
The accident comes as the market for the type of coal produced at the mine where the explosion occurred has tightened because of rebounding demand from steel producers in China and India. Massey, Alpha Natural Resources Inc., Patriot Coal Corp. and Walter Energy Inc. all mine metallurgical coal for use in steel manufacturing.
Walter sells most of its coal overseas.
As Massey's shares slumped Tuesday, shares of Alpha, Patriot and Walter hit 52-week highs, before shedding some of those gains. Most analysts consider Alpha, based in Abingdon, Va., and Patriot, based St. Louis, to be direct competitors to Massey.
"Alpha Natural and Patriot Coal "will benefit from the current [metallurgical] coal tightness, and the fact that the good quality high-volatile market appears to have just gotten tighter," Brean Murray, Carret & Co. analyst Jeremy Sussman wrote in a note to investors.
Walter, based in Tampa, Fla., has met coal mines in Alabama at the southern tip of the Appalachian coal region. Some analysts said the benefit to Walter may be more limited because of the grade of coal it produces and its customer base.
Other companies that could benefit somewhat from a tighter market include Consol Energy Inc. of Canonsburg, Pa., which produces some metallurgical coal as well as thermal coal for generating electricity, Credit Suisse analyst David Gagliano said in a note to clients.