Stable US coal production for week ending 6 June

T.L. Headley, West Virginia Coal Association.

Coal production in the US finished the week slightly up compared to last week, but continues to be down from last year. Production for the week ending 6 June rose 0.3% from last week, but remains 18% below last year's levels, according to the latest report from the US Energy Information Agency (EIA).Production in the US increased by 56 000 short t to finish the week at 15.12 million short t compared to last week's total of 15.07 million short t. Production for the week, however, is off by 3.31 million short t from the 18.44 million short t for the same week in 2014. Cumulative production for the year-to-date is also down sharply as of 6 June, coming in at 394.03 million short t compared to 427.99 million short t last year – a decline of 33.96 million short t (7.9%). Production for the previous 52 weeks also trended lower and finished at 963.29 million short t compared to 987.50 million short t for the same period ending in 2014 (-2.5%).?

The number of railcar loadings was also down sharply, finishing the week down 19% from the same period last year. Railcar loadings continued their decline year-to-date – off 7.6% from the same period in 2014.?

Coal exports (reported through April) are sharply lower compared to the same week last year. Metallurgical exports declined 15.6% to 4.23 million short t compared to 5.01 million short t for the same week in 2014. Thermal coal exports were down 5.4% to 2.91 million short t compared to 3.07 million short t last year. Imports of coal were also down – off 5.4% to 879 000 short t compared to 930 000 short t in 2014. However, year-to-date imported coal to the US is up 15.1% to 3.89 million short t, compared to 3.38 million short t in 2014.?

Electric output was off 6% compared to the same week in 2014. With 74.76 MWh of electricity produced compared to 79.56 MWh produced for the same period last year.

Domestic steel output finished sharply down for the week, returning to its long-term downward trend. According to numbers from the American Iron and Steel Institute, domestic steel production was down 8.8% for the week, at 1.72 million short t, with a capacity utilisation factor of 72.8%, compared to the same week in 2014. And steel production continues its slide year-to-date, declining 7.3% to 38.36 million short t produced compared to 41.39 million short t for the same period last year. As noted in previous reports, steel production is a strong indicator of the status of the broader economy and the continued declines in steel production point to declines in durable goods orders and a softening of the national economy in the near- to mid-term.?

In terms of regional coal production, all three basins reported slight 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 4.14 million short t, increasing from 4.13 million short t last week. Interior Basin production also finished up slightly, at 2.85 million short t compared to 2.84 million short t last week. Western production finished the week at 8.12 million short t from 8.10 million short t last week. However, these numbers are sharply below the same week in 2014. The Appalachian Basin is off by 21% from the same week last year. The Interior Basin is off 16% from 2014. And Western production is off 17.5% from the same period in 2014.

All three basins also continue to report significant declines in production year-to-date, with Appalachia down 9.6%, the Interior Basin off 7.1% and the Western Basin down 7.4%.?

Looking at the previous 52 weeks, all three basins are trending lower for the period ending 6 June, with the Appalachian Basin down 4.5%, the Interior Basin down 0.5% and the Western Region down 2.1%. Production in the Interior Basin fell to 182.64 million short t from 183.52 million short t for the same period in 2014. Appalachian production fell for the period to 256.10 million short t from 268.08 million short t. Meanwhile, Western production is down to 524.55 million short t from 535.90 million short t in 2014.

According to the West Virginia Office of Miners' Health, Safety and Training, coal production in the state for 2015 (reported through 11 June 2015) stands at 40.53 million short t year-to-date, with 32.76 million short t produced underground and 7.77 million short t produced through opencast operations. The number of mines reporting production dropped to just 111. 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 15 395 compared to 15 461 last week. Underground operations had 12 512 direct mining employees, while surface operations fell to 2878 employees. Again, these numbers are expected to change with additional reports.

Production rose slightly in both the northern and southern coalfields of West Virginia compared to last week, by 0.4%in both areas; however year-to-date, production is off by 2.7% and 15.5% respectively.

Coal production in Kentucky for the week ending 6 June was up slightly from the previous week but remains down sharply from the same period in 2014. Kentucky production for the week was reported at 1.17 million compared to 1.16 million short t last week and 1.49 million short t for the same week in 2014, with the state seeing significant declines in both its eastern and western fields y/y. Year to date, production in Kentucky is off by 10.9%.

Meanwhile, coal production in Kentucky is off by 6.6% for the previous 52 weeks, with western Kentucky reporting a 6.2% decline and eastern Kentucky operations reporting a decline of 6.9% y/y.

Wyoming coal production was down sharply for the week compared to 2014, coming in at 5.87 million short t, compared to 5.85 million short t the previous week, but was down from the 7.08 million short t produced for the same week in 2014 – a decline of 17.1%. For the previous 52 weeks, Wyoming production is down 2.7%. Illinois production also finished sharply lower for the week, coming in at 927 000 short t compared to 1.02 million short t for the same period in 2014. Indiana production is down as well, coming in at 582 000 short t compared to 724 000 short t for the week in 2014. Pennsylvania production for the week finished down slightly, to 1.03 million short t versus 1.17 million short t for the same week in 2014, but remains up 5.6% for the previous 52 weeks. Ohio production was off as well, dropping to 333 000 short t compared to 473 000 short t in 2014. Ohio coal production is off 12.5% for the previous 52 weeks, compared to the same period ending in 2014. Virginia production was also off this week – 219 000 short t compared to 296 000 short t for the same week in 2014. Virginia production for the previous 52 weeks is off by 13.1%.

Coal prices on the spot market were unchanged this week. Central Appalachian coal held at US$52.75/short t or US$2.11/million Btu. Northern Appalachian coal held at US$58.75/short t or US$2.27/million Btu. Illinois Basin coal prices held at US$40.45/short t or US$1.71/million Btu, while Powder River Basin coal remained steady at US$11.55/short t or US$0.66/million Btu, and Uinta Basin coal prices held firm at US$39.20/short t or US$1.68/million Btu.Meanwhile, on the NYMEX Coal Futures board, Central Appalachian coal was trading at US$44.3/short t, while Western Rail was selling at US$9.95/ short t and Eastern Rail was selling at US$41.87/short t.?

Natural gas prices on the Henry Hub finished the week at US$ 2.65/million Btu. Natural gas producers again reported a significant increase in their stored reserves – up 132 billion ft3 compared to the previous week, for a total of 2.23 trillion ft3 in storage. This week's working natural gas rotary rig count remained at 868, down by 7 from last week and down from 1860 a year ago – a 53.4% decrease. This number includes rigs working in both oil and gas plays.

Written by T.L. Headley. Edited by Harleigh Hobbs. This article first appeared in the WV Coal Seam blog of the West Virginia Coal Association.

Read the article online at: https://www.worldcoal.com/coal/15062015/stable-us-coal-production-for-week-ending-6-june-2414/