|Coal Commodity Region/Fuel||Avg. BTU||SO2||Price||Price/mmBTU|
|Central Appalachia||12,500||1.2||$52.85||$ 2.11|
|Northern Appalachia||13,000||3||$60.90||$ 2.34|
|Illinois Basin||11,800||5||$40.45||$ 1.71|
|Powder River Basin||8,800||0.8||$11.55||$ 0.66|
|Uinta Basin||11,700||0.8||$39.30||$ 1.68|
|Natural Gas (Henry Hub)||n/a||0.01||n/a||$ 2.72|
By T.L. HEADLEY, MBA, MAT, MA
Production in the United States is down by 1.63 million tons (7.6%) for the week ending May 2 compared to the same time last year. Production for the week stood at 17.36 million tons compared to 18.98 million tons for the same week in 2014. Cumulative production for the year-to-date is also down sharply as of May 2 coming in at 315.27 million tons compared to 333.86 million tons last year – a decline of 18.59 million tons or 5.4%. Production for the previous 52 weeks also trended lower – finishing at 979.05 million tons compared to 986.49 million tons for the same period ending in 2014.
The number of rail car loadings was also down sharply, finishing the week down 9.7% from the same period last year. Rail car loadings are also down sharply year-to-date – off 5.3% from the same period in 2014.
Electric output was down slightly – by 1.9% for the week ending May 2 – but also down (-0.4%) year-to-date. Steel output continued its decline, down 7.0% for the week, finished at 1.71 million tons produced, with a capacity utilization factor of 76.6%, and it continues its slide year-to-date — down 6.9% to 29.84 million tons produced compared to 32.06 million tons for the same period 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 and a softening of the national economy.
Looking at regional coal production the results were positive, with all three major basins reporting increases in production.
The Appalachian Basin was up for the week – at 4.76 million tons from 4.60 million tons the previous week. Interior Basin production was also up for the week –finishing at 3.27 million tons from 3.17 million tons last week. Western production was ticked upward this week, to 9.33 million tons from 9.04 million tons last week. All three basins continue to report significant declines in production year-to-date, with Appalachia down 6.7%, the Interior Basin off 5.2% and the Western Basin down 4.9%.
Looking at the previous 52 weeks, Appalachian and Western Basin production results continued to be down for the period ending May 2, declining 2.7% and 0.3% respectively. Meanwhile production in the Interior Basin was up 0.7% for the period — increasing slightly to 185.01 million tons from 183.68 million tons for the same period in 2014. Appalachian production fell for the period to 261.30 million tons from 268.63 million tons. Meanwhile, Western production is down to 532.73 million tons from 534.18 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 May 7, 2015) stands at 30.38 million tons year-to-date, with 24.23 million tons produced underground and 6.15 million tons produced through surface operations. The number of mines reporting production in March increased to125. The number of mines reporting production is subject to change as additional reports are submitted. The number of active miners working ticked down, coming in at 15,624 compared to 15,656 last week. Underground operations had 12,715 direct mining employees while surface operations finished up at 2,909 employees. Again, we expect those numbers to change with additional reports.
Coal production in Kentucky for the week ending May 2 ticked down to 1.34 million tons compared to 1.54 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 5% for the previous 52 weeks, with western Kentucky fields reporting production declines of 5.2% and eastern Kentucky operations reporting declines of 4.8%.
Wyoming coal production finished down for the week compared to 2014, coming in at 6.74 million tons, off from 7.30 million tons – or a decline of 8%. For the previous 52 weeks, Wyoming production is down 0.9%. Illinois production is up slightly for the week, coming in at 1.06 million tons compared to 1.05 for the same period in 2014. Indiana production is down as well, coming in at 668,000 tons compared to 745,000 tons for the week in 2014. Pennsylvania production for the week is also down slightly, to 1.18 million tons versus 1.21 million tons for the same week in 2014, but is up 8.6% for the previous 52 weeks. Ohio production is off as well — dropping to 382,000 tons compared to 487,000 tons in 2014. Virginia production was also off this week – to 251,000 tons compared to 305,000 tons for the same week in 2014. Virginia production for the previous 52 weeks is off by 11.8 percent.
Coal prices on the spot market were little changed this week. Central Appalachian coal held steady at $52.85 per ton, down 3 cents per ton, to $2.12 per million Btu. Northern Appalachian coal also declined slightly to $60.90 per ton, down 2 cents per ton, to $2.34 per mmBtu. Illinois Basin coal prices was firm at $40.45 per ton, down 32 cents per ton, to $1.73 per million Btu, while Powder River Basin coal was unchanged at $11.55 per ton or $0.66 per million Btu, and Uinta Basin coal prices fell to $39.30 per ton, off 32 cents per ton, to $1.70 per million Btu.
Natural gas prices on the Henry Hub jumped 22 cents to $2.72 per million Btu. Natural gas producers reported an increase in their stored reserves – up 81 billion cubic feet compared to the previous week. This week’s working natural gas rotary rig count dropped to 894, from 905 last week and 1,855 a year ago. This number includes rigs working in both oil and gas plays.