By T.L. HEADLEY, MBA, MAT, MA
Production in the United States is down by more than 2 million tons (10%) for the week ending March 28 compared to the same time last year. Production for the week stood at 18.27 million tons compared to 20.28 million tons for the same week in 2014. Cumulative production for the year-to-date also remained down as of March 28 coming in at 229.13 million tons compared to 237.10 million tons last year – a decline of 3.4%.
Rail car loadings also continued to decline, down 8.6% for the week from the same period last year, and they are down 2.4% year-to-date.
Coal export data was not reported this week.
Electric output was down – by 2.5% for the week ending March 28 – and is down slightly (-0.5%) year-to-date. Steel output declined again for the week, down 12.8% for the week to just 1.63 million tons produced and it continues its slide year-to-date — down 5.7% to 21.55 million tons produced compared to 22.85 million tons last year. As noted previously, 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 Basin production was up slightly for the week – at 4.99 million tons from 4.98 million tons the previous week. Interior Basin production was also up slightly for the week – settling at 3.42 million tons from 3.41 million tons last week. Western production also finished slightly higher this week, to 9.85 million tons from 9.80 million tons last week.
The Interior and Western Basins continued to show increased production for the previous 52 weeks ending March 28st. Production in the Appalachian Basin turned down slightly for the 52-week period — to 267.04 million tons from 268.22 million tons in 2014. Interior Basin production increased by1.0%, to 185.08 million tons from 183.17 million tons for the same period ending in 2014. Meanwhile, Western production was up 0.6%, to 533.93 million tons from 530.63 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 26, 2015) stands at 17.17 million tons year-to-date, with 13.39 million tons produced underground and 3.79 million tons produced through surface operations. Only 89 mines reporting production in February. The number of mines reporting production is subject to change as additional reports are submitted. On a side note, the number of active miners working was reported at 15,582, down from 18,200 in January. Again, we expect those numbers to change with additional reports.
Coal production in Kentucky for the week ending March 28 ticked down to 1.43 million tons compared to 1.62 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 2.4% for the previous 52 weeks, with western Kentucky fields reporting production declines of 3.1% and eastern Kentucky operations reporting declines of 1.7%.
Wyoming coal production also ticked down for the week to 7.15 million tons, off from 8 million tons for the same week in 2014. For the year, Wyoming production is up slightly (0.3%). Illinois production is also down slightly for the week, coming in at 1.05 million tons compared to 1.17 for the same period in 2014. Indiana production, likewise, is down, coming in at 726,000 tons compared to 817,000 tons for the week in 2014. Pennsylvania production for the week is also down slightly, to 1.23 million tons versus 1.29 million tons for the same week in 2014, but is up 11.1% for the previous 52 weeks. Ohio production is off as well — dropping to 391,000 tons compared to 459,000 tons in 2014. Virginia production was also off this week – to 289,000 tons compared to 341,000 tons for the same week in 2014. Virginia production for the previous 52 weeks is off by 7.4 percent.
Coal prices on the spot market once again held firm this week. Central Appalachian coal remains unchanged at $53.06 per ton. Northern Appalachian coal likewise, remains unchanged 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 on the Henry Hub are down slightly to $2.64 per million Btu compared to $2.68 per million Btu last week. Natural gas producers reported an increase in their stored reserves – up 12 billion cubic feet compared to the previous week. Eastern fields reported a decline of 22 billion cubic feet while all other fields saw increased gas in storage. This week’s working natural gas rotary rig count came in at 1028. This number includes rigs working in both oil and gas plays.
Utilities did not issue updates to their stockpile reports once again this week.
BakerHughes Rig Count at http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsoverview
U.S. Energy Information Agency Weekly Coal Report at http://www.eia.gov/coal/production/weekly/tables/weekly_production.cfm.
West Virginia Office of Miners’ Health Safety and Training at http://www.wvminesafety.org/
Henry Hub Natural Gas Price Data from USEIA at http://www.eia.gov/dnav/ng/hist/rngwhhdm.htm.
EIA U.S. Electric Production Report at http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_01