|Coal 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||$2.87|
By T.L. HEADLEY, MBA, MA
Coal production in the U.S. for the week ending August 1 slipped slightly off the rec
ent high set last week, and production continues to fall short of last year according to the latest report from the Energy Information Agency (EIA) for the week.
Production in the United States was down by 802,000 tons (.5%) to finish the week at 17.72 million tons compared to last week’s total of 17.82 million tons but significantly above the 16.40 million tons produced two weeks ago. Meanwhile, production for the week is off by 3.12 million tons (11.3%) from the 20.08 million tons for the same week in 2014. Cumulative production for the year-to-date remains sharply down as of August 1, coming in at 528.15 million tons compared to 578.46 million tons last year – a decline of 50.31 million tons or 8.7%. Production for the previous 52 weeks also trended lower – finishing at 946.73 million tons compared to 984.86 million tons for the same period ending in 2014 (-3.9%).
Mirroring the coal production, the number of coal rail car loadings declined, finishing the week down 11.9% from same week in 2014 – to 102,999 carloads from 116.881 carloads last year. Coal loadings also continued their decline year-to-date – off 9.5% from the same period in 2014.
Exports of coal continue far below 2014 levels. EIA reports that for the month of June the United States exported 3.95 million tons of metallurgical coal and 1.80 million tons of steam coal — down 32.2% and 35.8% from June 2014 respectively.
Electric output was up 10.6 percent compared to the same week in 2014, with 93.09 MWH of electricity produced compared to 84.20 MWH produced for the same period last year.
Domestic steel output, however, was up from the previous week.
According to numbers from the American Iron and Steel Institute, domestic raw steel production was up .05% from the previous week, coming in at 1.76 million tons compared to 1.75 million tons last week with a capacity utilization factor of 73.6%. However, steel production was down sharply from the same week last year, when 1.91 million tons were produced at a capacity utilization rate of 79.6%. Steel production continues its slide year-to-date – down 7.7% to 52.25 million tons produced compared to 56.62 million tons for the same period last year.
In terms of regional coal production, all three major basins reported slightly lower production for the week ending August 1 compared to the previous week, and all continue sharply lower compared to the same week in 2014.
The Appalachian Basin finished at 4.62 million tons, down from 4.65 million tons last week (-.07%). Interior Basin production also finished down at 3.41 million tons compared to 3.44 million tons last week (-.09%). Western production finished the week down at 9.69 million tons from 9.74 million tons last week (-.06%). And production remains sharply below the same week in 2014. The Appalachian Basin is off by 13% from the same week last year. The Interior Basin is off 13% from 2014. And Western production is off 11.1% from the same period in 2014.
All three basins also continue to report significant declines in production year-to-date, with Appalachia down 12.6%, the Interior Basin off 7.5% and the Western Basin down 7.1%.
Looking at the previous 52 weeks, all three basins are also trending lower for the period ending August 1, with the Appalachian Basin down 7.5%, the Interior Basin down 1.8% and the Western Region down 2.8%. Production in the Interior Basin fell to 180.07 million tons from 183.32 million tons for the same period in 2014. Appalachian production fell for the period to 247.34 million tons from 267.40 million tons. Meanwhile, Western production is down to 519.32 million tons from 534.14 million tons in 2014.
According to the West Virginia Office of Miners’ Health Safety and Training, coal production in the state now stands at 52.57 million tons through July 30. Of that total, 42.01 million tons was mined by underground operations and 10.56 million tons was produced by surface mining. A total of 112 mines are now reporting production through June 2015.
According to WV OMHST, coal mining employment in West Virginia rose slightly to 15,251 total miners, with 12,439 working underground and 2,812 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 1.96 million tons compared to 1.98 million tons for the previous week (-.6%). West Virginia production is off by 11.8% from the same week in 2014.
Production decreased in both the northern and southern coalfields of West Virginia compared to last week, by -.6% in both the northern and southern coalfields. Production is off in both areas year-to-date, by 1.1% and 17.7% respectively.
Coal production in Kentucky for the week ending August 1 was also compared to the previous week and remains down from the same period in 2014. Kentucky production for the week was reported at 1.30 million tons, up from 1.31 million tons last week but down from the 1.56 million tons for the same week in 2014. Both the eastern and western regions of Kentucky appear to have stabilized their production but the state continues to see significant declines in both fields year over year. Year to date, production in Kentucky is off by 16.1%. Meanwhile production in the state is off by 10.9% for the previous 52 weeks, with western Kentucky reporting an 9.2% decline and eastern Kentucky operations reporting a decline of 12.6% year-over-year.
Wyoming coal production was also down for the week, coming in at 7.04 million tons, compared to 7.08 million tons the previous week, but down from the 7.91 million tons produced for the same week in 2014 – a decline of 11%. For the previous 52 weeks, Wyoming production is down 2.2%.
Illinois production also finished lower, at 1.16 million tons compared to 1.17 million tons last week. Illinois production remains up by 12.4% for the previous 52 weeks. Indiana production came in at 671,000 compared to 675,000 tons for the same week in 2014. Indiana production is also down by 6.5% over the previous 52 weeks. Pennsylvania production for the week was also down, to just 1.1 million tons versus 1.11 million tons for the previous week, and production in the Keystone State is down slightly (1.7%) for the previous 52 weeks.
Ohio production also finished slightly lower – at 365,000 tons compared to 367,000 tons the previous week. Ohio coal production is off 17.1% year-to-date and down 13.7% for the previous 52 weeks, compared to the same period ending in 2014. Virginia production decreased slightly this week – to 242,000 tons compared to 243,000 tons for last week. Virginia production year-to-date is off by 16.6% and down for the previous 52 weeks by 14.8%.
Coal prices on the spot market held steady this week. Central Appalachian coal held at $49.95 per ton or $2.00 per mmBtu. Northern Appalachian coal held at $52.25 per ton or $2.01 per mmBtu. Illinois Basin coal closed unchanged at $34.35 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 $42.88 per ton compared to $43.14 per ton to last week, while Western Rail rose to $10.34 per short ton from $10.22 and Eastern Rail coal is up to $43.73 per short ton from $42.27 the previous week.
Natural gas prices on the Henry Hub fell 2 cents to finish the week at $2.87 per mmBtu. Natural gas producers again reported a significant increase in their stored reserves – up 52 billion cubic feet compared to the previous week, for a total of 2.88 trillion cubic feet in storage. This week’s working natural gas rotary rig count is up by 10 from last week to 884 working rigs. However, the count remains down by 1024 rigs from a year ago – down 54%. This number includes rigs working in both oil and gas plays.