SunCoke Energy Continues to Review Proposed Kentucky Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Metallurgical coke producer SunCoke Energy Incorporated (NYSE:SXC) (Lisle, Illinois) is still gauging customer support for a potential grassroot plant in Kentucky, according to Chairman and Chief Executive Officer Fritz Henderson. "Just stay tuned," he told investment analysts during the company's earnings conference call on Friday. SunCoke said it had solid results for the quarter.

The company incurred a net loss of $3.6 million, compared with a profit of $6.2 million in third-quarter 2013, but SunCoke attributed the loss to its discontinued Coal Mining operations, which are now up for sale. Income from continuing operations rose to $45.8 million from $31.8 million a year before, the company reported, largely on the strength of its Indiana Harbor operations in East Chicago, Indiana, and its new Coal Logistics business.

View Plant Profile - 1030963

Total revenues fell $5.8 million to $367.6 million, due to lower coal prices and reduced domestic coke sales volumes.

SunCoke reduced its projected capital expenditures for 2014 to $128 million from $138 million, primarily as a result of its discontinued coal operation.

Industrial Info is tracking three SunCoke projects worth $476.5 million, including the proposed, 800,000-ton-per-year South Shore grassroot metallurgical coke manufacturing plant in Kentucky.

The South Shore facility would have a total investment value of $400 million, with project kickoff as early as the fourth quarter of this year, and completion in fourth-quarter 2016, according to Industrial Info.

View Project Report - 10004303

The company was still talking with potential customers who would justify construction of the plant, Henderson said.

"You need to have 60 to 70% [of the sales from the plant] committed before you kick off," he said. While the economic environment for additional coke production is better, the company has not yet committed to building a new plant, he said.

SunCoke said it produced 1,090 tons of coke in the third quarter, up 9,000 tonnes from a year earlier. Higher production at its Granite City facility in Illinois led to the increase.

View Plant Profile - 1069859

Looking forward, Henderson said he expects coke demand by steelmakers to remain strong in 2015. "Demand in steel production is probably the most constructive since I have been with the company," he added.

Henderson said the company plans to completely exit the coal-mining business by the end of this year, and continues to negotiate with prospective buyers of the discontinued segment.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.