Coal shares slid on Wednesday after U.S. coal miner Alpha Natural Resources Inc cut its 2011 shipment forecast, citing reduced demand in the Asian steel market, among other things. The news came as the U.S. Federal Reserve shook global markets with pessimistic language about the economic outlook.
Asked about coal, CN Rail Chief Executive Claude Mongeau said Canada's biggest railroad has seen no change so far in exports from its network, which mostly handles metallurgical coal, used in steelmaking.
"I think the market is looking for signals, and it gets amplified whenever there's bit of bad news at the moment. People are quick to push on the fear button," he said, speaking at a conference in Montreal.
Railroads such as CN, which transport a cross-section of goods, are viewed as good barometers of economic health.
Rail volumes have produced no signs of a double dip recession yet, Mongeau said. Even though recession is possible, any slowdown would prove less severe than in 2008, he said.
Even so, Mongeau expects sluggish growth to continue for "many years."
"I'm just not sure we are not overreacting at the moment on macro calls, but it's tough, and I wouldn't want to second guess the market," he said.
Mongeau was speaking at the CIBC Eastern Institutional Investor Conference in Montreal. (Reuters)
