US coal production increases again for week ending 18 July

T.L. Headley, West Virginia Coal Association.

Coal production in the US rose sharply for the week ending 18 July in comparison with the previous week – continuing the positive trend of the past few weeks. However production continues to fall short of last year, according to the latest report from the US Energy Information Agency (EIA) for the week.

?Production in the US increased by 801 000 short t (4%) for the week ending 18 July but remains significantly down by 2.24 million short t (11.5%) from the 19.44 million short t for the same week in 2014. Cumulative production for the year-to-date remains down as of 18 July, coming in at 492.6 million short t compared to 538.54 million short t last year – a decline of 45.94 million short t or 8.5%. Production for the previous 52 weeks also trended lower and finished at 951.19 million short t compared to 985.32 million short t for the same period ending in 2014 (-3.5%).

Mirroring the coal production, the number of coal railcar loadings increased, finishing the week up 21% from the previous week – 99 975 carloads from 82 924 carloads last year. However, loadings remain down sharply compared to the 2014 (-11.6%). Coal loadings also continued their decline year-to-date - off 9.4% from the same period in 2014.

Export and import data was not updated this week.

Electric output was up 6.5% compared to the same week in 2014 with 88 MWH of electricity produced compared to 82.61 MWH produced for the same period last year.

Domestic steel output was also up over the previous week.

According to numbers from the American Iron and Steel Institute, domestic raw steel production was up by 0.7% from the previous week, coming in at 1.75 million short t compared to 1.74 million short t last week with a capacity utilisation factor of 73.3%. However, steel production was down sharply from the same week last year with 1.91 million short t were produced at a capacity utilisation rate of 79.6%. Steel production continues its slide year-to-date and is down 7.7% to 48.7 million short t produced compared to 52.79 million short t for the same period last year.

?In terms of regional coal production, all three major basins again reported higher production for the past week compared to the previous week, however all continue sharply lower compared to the same week in 2014.

The Appalachian Basin finished at 4.48 million short t, up from 4.28 million short t last week (+4%). Interior Basin production also finished up at 3.32 million short t compared to 3.16 million short t last week (+5%). Western production finished the week at 9.4 million short t from 8.96 million short t last week (+5%). However production remains sharply below the same week in 2014. The Appalachian Basin is off by 12.9% from the same week last year. The Interior Basin is off 11.8% from 2014. And Western production is off 10.9% 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 7.2% and the Western Basin down 6.9%.?Looking at the previous 52 weeks, all three basins are trending lower for the period ending July 18, with the Appalachian Basin down 7.0%, the Interior Basin down 1.2% and the Western Region down 2.5%. Production in the Interior Basin fell to 180.95 million short t from 183.16 million short t for the same period in 2014. Appalachian production fell for the period to 248.65 million short t from 267.30 million short t. Meanwhile, Western production is down to 521.59 million short t from 534.87 million short t in 2014.

?According to the West Virginia Office of Miners' Health Safety and Training, coal production in the state now stands at 50.4 million short t through 9 July. Of that total, 40.68 million short t was mined by underground operations and 9.71 million short t was produced by surface mining. A total of 112 mines are now reporting production through May 2015.

According to WV OMHST, coal mining employment in West Virginia has now dropped to 15 200 total miners with 12 401 working underground and 2799 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 totalled 1.96 million short t compared to 1.82 million short t for the previous week (+5.4%). However, this is off by 12.8% from the same week in 2014.

Production increased in both the northern and southern coalfields of West Virginia compared to last week, by 4.9% in the northern field and 4.8% in the 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 18 July was also up compared to the previous week but remains down from the same period in 2014. Kentucky production for the week was reported at 1.26 million short t, up from 1.2 million short t last week but down from the 1.51 million short t for the same week in 2014. Both the eastern and western regions of Kentucky reported significant increases in production from the previous week but the state continues to see significant declines in both fields y/y. Year to date, production in Kentucky is off by 16.2%. Meanwhile production in the state is off by 10.2% for the previous 52 weeks, with western Kentucky reporting an 8.6% decline and eastern Kentucky operations reporting a decline of 11.9% y/y.

?Wyoming coal production was also up for the week, coming in at 6.83 million short t compared to 6.52 million short t the previous week, but down from the 7.66 million short t produced for the same week in 2014 – a decline of 14.9%. For the previous 52 weeks, Wyoming production is down 2%.

?Illinois production was up, finishing the week at 1.13 million short t compared to 1.08 million short t last week. Illinois production is also up by 13.1% for the previous 52 weeks. Indiana production is up as well, coming in at 651 000 short t compared to 621 000 short t for the same week in 2014. Indiana production is also down by 6.3% over the previous 52 weeks. Pennsylvania production for the week also finished up to just 1.07 million short t versus 1.02 million short t for the previous week, but production in the Keystone State is now down slightly (0.9%) for the previous 52 weeks.

?Ohio production also finished slightly higher at 355 000 short t compared to 338 000 short t the previous week. Ohio coal production is off 17.4% year-to-date and down 13.5% for the previous 52 weeks, compared to the same period ending in 2014. Virginia production increased this week to 235 000 short t compared to 224 000 short t for last week. Virginia production year-to-date is off by 16.6% and down for the previous 52 weeks by 14.5%.

Coal prices on the spot market held steady this week. Central Appalachian coal finished at US$54.90/short t or US$2.20/million Btu. Northern Appalachian coal held at US$53.20/short t or US$2.05/million Btu. Illinois Basin coal closed unchanged at US$34.35/short t or US$1.46/million Btu, while Powder River Basin coal held at US$11.55/short t or US$0.66/million Btu, and Uinta Basin coal prices were firm at US$39.35/short t or US$1.68/million Btu.

?Meanwhile, on the NYMEX Coal Futures board, Central Appalachian coal is up to US$43.13/short t compared to US$41.03/short t to last week, while Western Rail fell 1 cent to US$10.04/short t and Eastern Rail coal is up to US$42.33/short t. ?Natural gas prices on the Henry Hub added 14 cents to finish the week at US$2.89/million Btu. Natural gas producers again reported a significant increase in their stored reserves - up 99 billion ft³ compared to the previous week for a total of 2.77 trillion ft³ in storage. This week's working natural gas rotary rig count is up by 19 from last week to 876 working rigs. However, the count remains down by 1007 rigs from a year ago – down 53%. 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/27072015/us-coal-production-increases-again-for-week-ending-18-july-2634/