Cloud Peak’s domestic coal shipments increased to an average of 5.7 million short t per month in 3Q16 as strong summer electricity demand an increased natural gas prices resulted in a high coal burn at its customers’ power plants. By comparison, average coal shipments in 1H16 were just 4.1 million short t.
“This has been a very good quarter for Cloud Peak Energy after a tough first half of the year,” said Colin Marshall, the company’s President and CEO.
And the company expects more in 4Q16, noting that with natural gas prices moving above US$3 per million Btu, some utilities are operating their coal units through the normal fall maintenance period.
“During September, the company started receiving an increase in requested for proposals with customers looking to contract for more of their future requirements,” the company said in its 3Q16 earnings statement. “There has been an increase in Powder River Basin pricing and the company is optimistic this trend will continue as coal demand recovers from the very low levels experienced in 1H16.”
Following an uptick in global thermal coal prices, the company also reported a return to coal exports, saying it had sold around 1 million short t to its Asian customers for delivery between November 2016 and February 2017.
“The turnaround in international thermal coal prices has been significant,” said Marshall. “If prices are sustained, we expect to be able to export additional tonnage next year.”
Overall, the company sold 17.1 million short t in 3Q16 compared in 20.8 million short t the year before. Revenue was US$217.1 million t with the company reporting a net loss of US$1.6 million t for the quarter.
Despite the quarterly loss, the company yearly loss to date stands at just US$2.7 million, compared to US$48.7 million over the first nine months of 2015.
Read the article online at: https://www.worldcoal.com/coal/01112016/cloud-peak-reports-promising-3q16/
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