US coal production continues to trend below 2014

T.L. Headley, West Virginia Coal Association

Coal production in the US for the week ending 7 November fell slightly from the previous week, continuing to trend below 2014, according to the latest report from the Energy Information Agency (EIA).

Production in the US was down by 158 000 short t (-1.0%) to finish the week at 16.47 million short t compared to last week’s total of 16.63 million short t. Meanwhile, production for the week is off by 2.87 million short t (15%) from the 19.35 million short t for the same week in 2014.

Cumulative production for the year-to-date remains sharply down as of 7 November, coming in at 775.60 million short t compared to 851.29 million short t last year – a decline of 75.68 million short t or 8.9%. Production for the previous 52 weeks also continues lower from last year– finishing at 921.85 million short t compared to 987.97 million short t for the same period ending in 2014 (-6.7%).

Meanwhile, the number of coal railcar loadings remains down from last year, finishing the week at 94 974 cars, off 1% from same week in 2014. Coal loadings also continued their decline year-to-date – off 9.6% from the same period in 2014.

Coal exports for the month of September continue sharply below last year. Metallurgical coal exports are off by 33.2% from September 2014 and thermal coal exports are off by 27.4% Imports of coal into the US is up by 21.3%. Year-to-date, metallurgical coal exports are down 21.5% and thermal coal exports are down 22.6% compared to the same period last year. Imports of coal are up 6.1% for the period versus last year.

Electric output was down 1.8% compared to the same week in 2014, with 68.62 MWh of electricity produced compared to 69.89 MWh produced for the same period last year.

Domestic steel output, however, was down from the previous week.

According to numbers from the American Iron and Steel Institute, domestic raw steel production was down 1.4% from the previous week, coming in at 1.62 million short t compared to 1.64 million short t last week, with a capacity utilisation factor of 67.7%. Steel production is down sharply from the same week last year, when 1.86 million short t were produced at a capacity utilisation rate of 77.2%. Steel production continues its slide year-to-date – down 8.2% to 76.13 million short t produced compared to 82.94 million short t for the same period last year.

In terms of regional coal production, all three major basins reported modest losses for the week ending 7 November compared to the previous week, but all continue sharply lower compared to the same week in 2014.

The Appalachian Basin finished at 4.03 million short t, down from 4.04 million short t last week (-0.5%). Interior Basin production also finished down at 3.17 million short t compared to 3.24 million short t last week (-2.2%). Western production finished the week lower at 9.27 million short t from 9.36 million short t last week (-0.1%). However, production remains sharply below the same week in 2014. The Appalachian Basin is off by 17.1% from the same week last year. The Interior Basin is off 13.9% from 2014. And Western production is off 14.2% from the same period in 2014.

All three basins also continue to report significant declines in production year-to-date, with Appalachia down 13.6%, the Interior Basin off 8.6% and the Western Basin down 6.6%.

Looking at the previous 52 weeks, all three basins continue lower for the period ending 7 November, with the Appalachian Basin down 11.6%, the Interior Basin down 6% and the Western Region down 4.5%. Production in the Interior Basin fell to 174.43 million short t from 185.52 million short t for the same period in 2014. Appalachian production fell for the period to 236.49 million short t from 267.57 million short t. Meanwhile, Western production is down to 510.93 million short t from 581.73 million short t in 2014.

According to the West Virginia Office of Miners’ Health Safety and Training (WVOMHST), coal production in the state now stands at 81.10 million short t through 5 November. Of that total, 65.39 million short t was mined by underground operations and 15.71 million short t was produced by opencast mining. A total of 107 mines are now reporting production through September 2015.

According to the WVOMHST, coal mining employment in West Virginia fell slightly to 14 848 total miners, with 12 052 working underground and 2796 working on opencast operations. The office does not report data for contract miners or preparation plant workers on a weekly basis.

According to the EIA, West Virginia coal production for the week totalled 1.74 million short t essentially unchanged from the previous week (-1%). Meanwhile, West Virginia production is off by 13.9% from the same week in 2014.

Production was up in the northern coalfields but down in the southern coalfields of West Virginia compared to last week, by 0.4% and 0.2% respectively. However, production is off in both areas year-to-date, by 1.3% and 18.2% respectively.

Coal production in Kentucky for the week ending 7 November was also up slightly compared to the previous week but remains down from the same period in 2014. Kentucky production for the week was reported at 1.12 million short t, up from 1.11 million short t last week but down from the 1.39 million short t for the same week in 2014. Production in eastern Kentucky picked up slightly, while western production declined slightly. Year to date, production in Kentucky is off by 16.5%. Meanwhile production in the state is off by 41.7% for the previous 52 weeks, with western Kentucky reporting an 11.8% decline and eastern Kentucky operations reporting a decline of 17.8% y/y.

Wyoming coal production was down for the week, coming in at 6.87 million short t, compared to 6.94 million short t the previous week, but down from the 7.93 million short t produced for the same week in 2014 – a decline of 1.1%. For the previous 52 weeks, Wyoming production is down 9%.

Illinois production finished down at 1.15 million short t compared to 1.20 million short t last week. Illinois production is up by 8.7% for the previous 52 weeks.

Indiana production came in at 638 000 short t compared to 642 000 short t for the same week in 2014. Indiana production is down by 7.2% over the previous 52 weeks. Pennsylvania production for the week was also down to 941 000 short t versus 950 000 short t for the previous week, and production in the Keystone State is down sharply (-10.9%) for the previous 52 weeks.

Ohio production also ticked slightly higher at 301 000 short t compared to 298 000 short t the previous week. Ohio coal production is off 19.6% year-to-date and down 17.8% for the previous 52 weeks, compared to the same period ending in 2014. Virginia production was unchanged this week – at 227 000 short t. Virginia production year-to-date is off by 12.6% and down for the previous 52 weeks by 12.6%.

Coal prices on the spot market were mixed this week. Central Appalachian coal rose slightly to finish the week at US$1.96/million Btu. Northern Appalachian coal also finished slightly up, coming in at US$52.00/short t or US$2.00/million Btu. Illinois Basin coal closed down at US$32.75/short t or US$1.39/million Btu, while Powder River Basin coal held at US$11.55/short t or US$0.66/million Btu. Uinta Basin coal prices finished at US$40.55.short t or US$1.73/million Btu.

Meanwhile, on the NYMEX Coal Futures board, Central Appalachian coal is down to US$42.02/short t compared to US$41.88/short t to last week, while Western Rail rose slightly to US$10.18/short t from US$10.16/short t and Eastern Rail coal is up to US$37.63/short t from US$36.62/short t the previous week.

Natural gas prices on the Henry Hub continued to fall this week to finish the week at US$2.02/million Btu. Natural gas producers again reported a significant increase in their stored reserves – up 52 billion ft3 compared to the previous week, for a total of 3.93 trillion ft3 in storage. This week’s working natural gas rotary rig count is down by 4 from last week to 771 working rigs. And the count remains down by 1154 rigs from a year ago – a decline of 60%. 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/16112015/us-coal-production-continues-to-trend-below-2014-3158/