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US COAL PRODUCTION CONTINUES TO GAIN AND CLOSES GAP ON 2014

Coal Commodity
Region/Fuel

Avg. BTU

SO2

Price

Price/mmBTU

Central Appalachia

12,500

1.2

$48.60

$1.94

Northern Appalachia

13,000

3

$51.90

$2.00

Illinois Basin

11,800

5

$34.35

$1.46

Powder River Basin

8,800

0.8

$11.55

$0.66

Unita Basin

11,700

0.8

$39.75

$1.70

Natural Gas
(Henry Hub)

n/a

0.01

n/a

$2.69

CHARLESTON –Coal production in the U.S. for the week ending August 29th rose for the fourthstraight week, continuing a long-term upward trend, and to narrow the gap to last year’s totals significantly in recent weeks, according to the latest report from the Energy Information Agency (EIA).

 

Production in the United States was up by 240,000 tons (1.3%) to finish the week at 18.70 million compared to last week’s total of 18.46 million tons. Meanwhile, production for the week is off by 888,000 tons (4.6%) from the 19.59 million tons for the same week in 2014.

Cumulative production for the year-to-date remains sharply down as of August 29, coming in at 601.83 million tons compared to 657.93 million tons last year – a decline of 56.10 million tons or 8.5%. Production for the previous 52 weeks also continues lower from last year– finishing at 941.01 million tons compared to 982.52 million tons for the same period ending in 2014 (-4.2%).
Mirroring the coal production, the number of coal rail car loadings remains down from last year, finishing the week at 108,710 cars, off 4.6% from same week in 2014. Coal loadings also continued their decline year-to-date – off 9.2% from the same period in 2014.
Coal exports were not updated this week.

Electric output was down 4.1% compared to the same week in 2014, with 83.47 MWH of electricity produced compared to 87.03 MWH produced for the same period last year.
Domestic steel output, however, was down from the previous week.

According to numbers from the American Iron and Steel Institute, domestic raw steel production was down 2.2% from the previous week, coming in at 1.70 million tons compared to 1.74 million tons last week, with a capacity utilization factor of 71.2%.  However, steel production was down sharply from the same week last year, when 1.93 million tons were produced at a capacity utilization rate of 80.2%. Steel production continues its slide year-to-date – down 8.0% to 59.23 million tons produced compared to 64.34 million tons for the same period last year.

In terms of regional coal production, all three major basins reported modest gains for the week ending August 29 compared to the previous week, but all continue sharply lower compared to the same week in 2014.

The Appalachian Basin finished at 4.88 million tons, up from 4.81 million tons last week (1.4%). Interior Basin production also finished slightly up at 3.61 million tons compared to 3.56 million tons last week (1.4%). Western production finished the week higher at 10.22 million tons from 10.09 million tons last week (1.3%).  However, production remains sharply below the same week in 2014. The Appalachian Basin is off by 6% from the same week last year. The Interior Basin is off 4.8% from 2014. And Western production is off 3.8% from the same period in 2014.
All three basins also continue to report significant declines in production year-to-date, with Appalachia down 12.1%, the Interior Basin off 7.5% and the Western Basin down 7.0%.
Looking at the previous 52 weeks, all three basins continue lower for the period ending August 29, with the Appalachian Basin down 8.1%, the Interior Basin down 2.4% and the Western Region down 2.9%. Production in the Interior Basin fell to 178.93 million tons from 183.36 million tons for the same period in 2014. Appalachian production fell for the period to 245.54 million tons from 267.25 million tons. Meanwhile, Western production is down to 516.53 million tons from 531.92 million tons in 2014.

According to the West Virginia Office of Miners’ Health Safety and Training, coal production in the state now stands at 60.12 million tons through August 27. Of that total, 47.78 million tons was mined by underground operations and 12.34 million tons was produced by surface mining. A total of 90 mines are now reporting production through July 2015.

According to WVOMHST, coal mining employment in West Virginia fell slightly to 15,052 total miners, with 12,226 working underground and 2,826 working on surface operations. The office does not report data for contract miners or preparation plant workers on a weekly basis.
According to EIA, West Virginia coal production for the week totaled 2.07 million tons compared to 2.05 million tons for the previous week (-1%).  Meanwhile, West Virginia production is off by 4.5% from the same week in 2014.

Production was up in both the northern and southern coalfields of West Virginia compared to last week, by .04% and .02% respectively. However, production is off in both areas year-to-date, by 1.1% and 1.2% respectively.

Coal production in Kentucky for the week ending August 29 was also up compared to the previous week and remains down from the same period in 2014. Kentucky production for the week was reported at 1.37 million tons, up from 1.35 million tons last week but down from the 1.52 million tons for the same week in 2014. The eastern and western regions of Kentucky but the state appear to again be seeing significant declines year over year. Year to date, production in Kentucky is off by 15.7%. Meanwhile production in the state is off by 11.7% for the previous 52 weeks, with western Kentucky reporting a 10.0% decline and eastern Kentucky operations reporting a decline of 13.5% year-over-year.

Wyoming coal production was up for the week, coming in at 7.43 million tons, compared to 7.33 million tons the previous week, but down from the 7.72 million tons produced for the same week in 2014 – a decline of 3.8%. For the previous 52 weeks, Wyoming production is down 2.2%. Illinois production also finished slightly up at 1.23 million tons compared to 1.22 million tons last week. Illinois production is up by 11.5% for the previous 52 weeks.

Indiana production came in at 708,000 compared to 699,000 tons for the same week in 2014. Indiana production is down by 6.5% over the previous 52 weeks. Pennsylvania production for the week was also slightly up, to 1.16 million tons versus 1.15 million tons for the previous week, and production in the Keystone State is down slightly (-2.9%) for the previous 52 weeks.
Ohio production also ticked slightly higher – at 386,000 tons compared to 381,000 tons the previous week. Ohio coal production is off 16.4% year-to-date and down 13.7% for the previous 52 weeks, compared to the same period ending in 2014. Virginia production increased slightly this week – to 255,000 tons compared to 252,000 tons for last week. Virginia production year-to-date is off by 16.2% and down for the previous 52 weeks by 14.9%.

Coal prices on the spot market were mixed this week. Central Appalachian coal rose to at $4 per ton or $1.94 per mmBtu. Northern Appalachian coal also fell, coming in at $51.90 per ton or $2.00 per mmBtu. Illinois Basin coal closed unchanged at $39.75 per ton or $1.46 per mmBtu, while Powder River Basin coal held at $11.55 per ton or $0.66 per mmBtu, and Uinta Basin coal prices were firm at $39.55 per ton or $1.69 per mmBtu.

Meanwhile, on the NYMEX Coal Futures board, Central Appalachian coal is down to $42.95 per ton compared to $42.92 per ton to last week, while Western Rail rose to $10.58 per short ton from $10.56 and Eastern Rail coal is up to $44.30 per short ton from $43.83 the previous week.
Natural gas prices on the Henry Hub fell 19 cents to finish the week at $2.69 per mmBtu. Natural gas producers again reported a significant increase in their stored reserves – up 69 billion cubic feet compared to the previous week, for a total of 3.10 trillion cubic feet in storage. This week’s working natural gas rotary rig count is down by 13 from last week to 864 working rigs. And the count remains down by 1,061 rigs from a year ago – a decline of 55.2%. This number includes rigs working in both oil and gas plays.


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