By T.L. HEADLEY, MBA, MA, MA
CHARLESTON – According to the latest report from the Energy Information Agency (EIA) and the National Mining Association, coal production in the United States is down by slightly less than 1.4 million tons for the week ending March 14th compared to the same time last year. Production for the week stood at 19.88 million tons compared to 18.51 million tons for the same week in 2014. Cumulative production for the year-to-date is also down as of March 14th at 192.68 million tons compared to 197.11 million tons last year.
There was a significant decrease in the number of rail car loadings, down 5.5% for the week from the same period last year. Rail car loadings are also down 1.4% year-to-date.
Exports for the month of January 2015, were down substantially, with exports of metallurgical coal off 2.4% and steam coal exports off 16.9% from the previous January. Meanwhile, imports were up 21.5% in January compared to last year.
Electric output was down for the week – by 0.6% for the week ending March 14th – and remains down slightly (-0.1%) year-to-date. Steel output continued its sharp decline for the week, down 13.1% for the week at 1.6 million tons produced. Steel production remains down year-to-date to 18.28 million tons produced compared to 19.11 million tons last year. A decline in steel production is considered a leading indicator of the broader economy and the continued declines we are seeing in steel production usually translate into declines in durable goods orders.
Looking at regional coal production, Appalachian production was up slightly for the week – to 5.07 million tons from 4.78 million tons last week. Interior Basin production was also up for the week – coming in at 3.47 million tons from 3.27 million tons last week. Western production also increased this week, to 9.98 million tons from 9.42 million tons last week.
All three regions continued to show increased production for the previous 52 weeks ending March 14th. For the 52-week period, Appalachia production was up slightly — to 268.09 million tons from 268.07 million tons in 2014. Interior Basin production was also up — by 1.7%, at 186.82 million tons from 182.70 million tons for the same period ending in 2014. Meanwhile, Western production was up 1.2%, to 535.74 million tons from 529.26 million tons in 2014.
According to the West Virginia Office of Miners’ Health, Safety and Training, coal production in the state for 2015 (reported through March 12, 2015) stands at 13.07 million tons year-to-date, with 9.9 million tons produced underground and 3.2 million tons produced through surface operations (we are uncertain as to the reason for the discrepancy). A total of 121 mines in the state now report production in January, although it is important to note that not all reports are in and the number of producing mines may be substantially higher than that number.
Production for other key coal-producing states is being reported once again by the EIA.
Coal production in Kentucky for the week ending March 14 ticked down to 1.44 million tons compared to 1.58 for the same week in 2014, with the state seeing declines in both its eastern and western fields. Meanwhile, coal production in Kentucky is off by 2% for the previous 52 weeks.
Wyoming coal production also ticked down for the week to 7.2 million tons, off from 7.8 million tons in 2014. For the year, Wyoming production is up slightly (0.4%).
Illinois production is also down for the week, coming in at 1.07 million tons compared to 1.15 for the same period in 2014. Indiana production, likewise, is down slightly, coming in at 736,000 tons compared to 800,000 tons in 2014. Pennsylvania production for the week is also down slightly, to 1.25 million tons versus 1.26 million tons for the same week in 2014. And Ohio production is off — to 396,000 tons compared to 450,000 tons in 2014. Virginia production ticked up this week – to 293,000 tons compared to 277,000 tons last week, but is off substantially compared to the same week in 2014, which saw production of 334,000 tons. Virginia production for the previous 52 weeks is off by 6.8 percent.
Coal prices on the spot market held steady again this week. Central Appalachian coal remains at $53.06 per ton. Northern Appalachian coal remains at $61.15 per ton. Illinois Basin coal prices held at $40.32 per ton, while Powder River Basin and Uinta Basin coal prices also held steady – at $11.55 and $38.13 per ton respectively.
Natural gas prices also held steady on the Henry Hub at approximately $3.20 per million Btu. Natural gas producers continued to report significant declines in their stored reserves – off 104 billion cubic feet compared to the previous week, with rig counts holding at approximately 400.
Utilities did not issue updates to their stockpile reports once again this week.