TORONTO (miningweekly.com) – US coal producer Arch Coal on Tuesday reported a 77% wider first-quarter loss as a result of challenging global steelmaking coal markets and the persistence of rail performance issues in Appalachia.

For the three months ended March 31, the NYSE-listed firm reported a net loss of $124.1-million, or $0.59 a share, compared with a loss of $70-million, or $0.33 a share, a year earlier.

After special items had been removed, the company reported an adjusted loss of $126.5-million, or $0.60 a share, compared with a loss of $71.8-million, or $0.34 a share, a year earlier.

Wall Street analysts were on average more optimistic, expecting an adjusted loss of $0.42 a share on revenue of $717.71-million.

The company’s revenue for the period was $736-million, just lower than that recorded in the same period a year earlier.

Arch’s stock on Tuesday generally trended down a negative vector, having lost around $0.44 a share in afternoon trading.

“As expected, our first-quarter results reflect a challenging global metallurgical coal market and the impact of rail performance issues. At Arch, we are taking proactive steps to manage our controllable costs and capital spending, reduce our cash outflows and preserve our liquidity,” Arch president and CEO John Eaves said.

Arch revealed that in response to soft market conditions it had reduced its expected metallurgical coal sales volume by about one-million tons for 2014, and would concentrate its metallurgical production at its lowest-cost assets in Appalachia. Arch said it now expected to ship between 6.3-million and 7.3-million tons of metallurgical coal, lower than its previous estimate of 7.5-million to 8.5-million tons.

Based on the smooth start-up of the Leer longwall mine in the first quarter, the company had lowered its full year cost-per-ton guidance in Appalachia.

The company lowered the top end of its 2014 cash cost guidance for its Appalachian operations by a dollar to $66/t, and kept the lower end intact at $63/t.

During the quarter, the miner had also divested non-strategic assets in Appalachia, including its Hazard thermal mining complex, in Kentucky, and its equipment subsidiary.

Meanwhile, Eaves said that Arch was seeing a strengthening US thermal coal market.

“Positive electric generation and coal demand trends to date, declining US coal generator stockpiles and higher competing fuel prices should provide the catalyst for improvement in our domestic thermal coal operations during 2014,” he said.

While the domestic thermal market was trending upward, the seaborne market remained challenged, as oversupply had pressured global prices for metallurgical and thermal coals.

However, Arch believes the long-term outlook for the seaborne coal trade remained positive and the opportunities for US coal significant.

It said that global coal trade was projected to exceed 1.5-billion metric tonnes by 2020, with about 100 GW of new coal-fuelled power projected to come on line in 2014 alone. That new coal-fuelled power could result in more than 300-million metric tonnes of additional coal demand this year.

Arch currently expects the global metallurgical coal market to remain soft, despite the expectation that global steel production would grow. However, recent and ongoing closures of some high-cost capacity and an improving demand outlook should lead to a more balanced market over time, the company said.

Arch’s NYSE-listed stock traded at $4.53 on Tuesday afternoon.