|Commodity Region/Fuel||Avg. BTU||SO2||Price||Price/mmBTU|
|Powder River Basin||8,800||0.8||$11.55||$0.66|
|Natural Gas (Henry Hub)||n/a||0.01||n/a||$2.90|
By T.L. HEADLEY, MBA, MA
CHARLESTON — Coal production in the U.S. continued its recovery this week, up just short of another million tons over the previous week. However production continues to be down from last year — off 12.2% from last year’s levels (18.5 million tons), according to the latest report from the Energy Information Agency (EIA) for the week ending June 20.
Production in the United States rose by 926 thousand tons (6.1%) to finish the week at 16.28 million tons compared to last week’s total of 15.36 million tons. Production for the week, however, is off by 2.07 million tons (12.2%) from the 18.54 million tons for the same week in 2014. Cumulative production for the year-to-date is also down sharply as of June 20, coming in at 425.67 million tons compared to 464.24 million tons last year – a decline of 38.53 million tons or 8.5%. Production for the previous 52 weeks also trended lower – finishing at 957.82 million tons compared to 984.70 million tons for the same period ending in 2014 (-2.5%).
The number of rail car loadings was remains down sharply, finishing the week off 13.3% from the same period last year. Rail car loadings also continued their decline year-to-date – off 8.5% from the same period in 2014. However, coal rail car loadings were up 6%, or 5,401 carloads, from the previous week, breaking a streak of three straight weeks where volumes were below 90,000 carloads.
Coal export/import data was not updated this week.
Electric output was up 1.4 percent compared to the same week in 2014. With 84.97 MWH of electricity produced compared to 83.79 MWH produced for the same period last year.
Domestic steel output, however, continued it’s near freefall this week.
According to numbers from the American Iron and Steel Institute, domestic raw steel production was down 8.8% for the week, at 1.72 million tons, with a capacity utilization factor of 73%, compared to the same week in 2014. And steel production continues its slide year-to-date – down 7.4% to 41.84 million tons produced compared to 45.17 million tons for the same period last year. The continuing slide in domestic steel production is fueled by a sluggish economy as well as increased imports of steel, much of it from China and South Korea.
In terms of regional coal production, all three basins reported significant increases in production over the past week compared to the previous week; however all remain down sharply compared to the same week in 2014.
The Appalachian Basin finished at 4.46 million tons, ticking up from 4.20 million tons last week (up 6%). Interior Basin production also finished up, at 3.07 million tons compared to 2.90 million tons last week (up 5%). Western production finished the week at 8.75 million tons from 8.25 million tons last week (up 6%). However, these numbers are sharply below the same week in 2014. The Appalachian Basin is off by 16% from the same week last year. The Interior Basin is off 9.2% from 2014. And Western production is off 11.7% from the same period in 2014.
All three basins also continue to report significant declines in production year-to-date, with Appalachia down 10.2%, the Interior Basin off 7.4% and the Western Basin down 7.9%.
Looking at the previous 52 weeks, all three basins are trending lower for the period ending June 20, with the Appalachian Basin down 4.8%, the Interior Basin down 0.6% and the Western Region down 2.5%. Production in the Interior Basin fell to 181.84 million tons from 182.86 million tons for the same period in 2014. Appalachian production fell for the period to 254.26 million tons from 266.94 million tons. Meanwhile, Western production is down to 521.73 million tons from 534.91 million tons in 2014.
According to the West Virginia Office of Miners’ Health Safety and Training, coal production in the state now stands at 43.35 million tons through June 23. Of that total, 34.78 million tons was by underground operations and 8.57 million tons was produced by surface mining. A total of 111 mines are now reporting production through April 2015.
According to WV OMHST, coal mining employment in West Virginia has now dropped to 15,373 total miners, with 12,517 working underground and 2,856 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 1.86 million tons compared to 1.76 million tons for the previous week. However, this is off by 15.5% from the same week in 2014.
Production rose slightly in both the northern and southern coalfields of West Virginia compared to last week, by 6 percent in both areas, however year-to-date, production is off by 3.2% and 16.2% respectively.
Coal production in Kentucky for the week ending June 20 was also up slightly compared to the previous week but remains down sharply from the same period in 2014. Kentucky production for the week was reported at 1.25 compared to 1.18 million tons last week and 1.50 million tons for the same week in 2014. Both the eastern and western regions of Kentucky reported solid increases in production over the previous week; however the state continues to see significant declines in both fields year over year. Year to date, production in Kentucky is off by 11.6%. Meanwhile production in the state is off by 6.8% for the previous 52 weeks, with western Kentucky reporting a 6.2% decline and eastern Kentucky operations reporting a decline of 7.8% year-over-year.
Wyoming coal production was up for the week compared to 2014, coming in at 6.32 million tons, compared to 5.96 million tons the previous week, but was down from the 7.12 million tons produced for the same week in 2014 – a decline of 11.3%. For the previous 52 weeks, Wyoming production is down 3%. Illinois production remains down, finishing the week at 997,000 tons compared to 1.03 million tons last year. Indiana production is down as well, coming in at 627,000 tons compared to 728,000 tons for the week in 2014. Pennsylvania production for the week finished down slightly, to 1.10 million tons versus 1.18 million tons for the same week in 2014, but remains up 4.9% for the previous 52 weeks. Ohio production is off as well – at 359,000 tons compared to 476,000 tons in 2014. Ohio coal production is off 12.8 percent for the previous 52 weeks, compared to the same period ending in 2014. Virginia production was also off this week – to 236,000 tons compared to 298,000 tons for the same week in 2014. Virginia production for the previous 52 weeks is off by 13.3 percent.
Coal prices on the spot market were unchanged this week. Central Appalachian coal held at $52.75 per ton or $2.11 per mmBtu. Northern Appalachian coal held at $58.75 per ton or $2.26 per mmBtu. Illinois Basin coal prices held at $40.45 per ton or $1.71 per mmBtu, while Powder River Basin coal remained steady at $11.55 per ton or $0.66 per mmBtu, and Uinta Basin coal prices held firm at $39.20 per ton or $1.66 per mmBtu.
Meanwhile, on the NYMEX Coal Futures board, Central Appalachian coal was trading at $41.13 per ton while Western Rail was selling at $10.09 per short ton and Eastern Rail was selling at $40.78 per short ton.
Natural gas prices on the Henry Hub finished the week up slightly at $2.90 per mmBtu. Natural gas producers again reported a significant increase in their stored reserves – up 111 billion cubic feet compared to the previous week, for a total of 2.43 trillion cubic feet in storage. This week’s working rotary rig count remained at 857, down by two from last week and by 1001 rigs from a year ago – down 54%. This number includes rigs working in both oil and gas plays.