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Continued declines in US coal production for week ending 29 May

Published by
World Coal,

T.L. Headley, West Virginia Coal Association.

Coal production in the US is down by 4.02 million short t for the week ending May 29 compared to the same period last year. Production for the week stood at 15.07 million short t compared to 19.01 million short t for the same week in 2014 and was off 900 000 short t from the previous week. Cumulative production for the year-to-date is also down sharply as of 29 May, coming in at 378.90 million short t compared to 408.74 million short t last year – a decline of 29.84 million short t or 7.5%. Production for the previous 52 weeks also trended lower – finishing at 966.60 million short t compared to 987.33 million short t for the same period ending in 2014 (-2.1%).?

The number of railcar loadings was also down sharply, finishing the week down 21.8% from the same period last year. Railcar loadings are also down sharply year-to-date – off 7.4% from the same period in 2014.

Electric output data was not updated again this week.

Domestic steel output finished down for the week. According to numbers from the American Iron and Steel Institute, domestic steel production was down 1.8% for the week, at 1.7 million short t, with a capacity utilisation factor of 73.3%. Steel production also continues its decline year-to-date — down 7.2% to 36.64 million short t produced compared to 39.50 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 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 decreases in production over the past week.? The Appalachian Basin finished at 4.13 million short t, down from 4.40 million short t in the previous week. Interior Basin production also finished down slightly, 2.84 million short t compared to 3.03 million short t last week. Western production finished the week at 8.10 million short t from 8.68 million short t last week. All three basins also continue to report significant declines in production year-to-date, with Appalachia down 9.0%, the Interior Basin off 6.7% and the Western Basin down 6.9%.?

Looking at the previous 52 weeks, all three basins are trending lower for the period ending 29 May, with the Appalachian Basin down 4.1%, the Interior Basin down 0.2% and the Western Region down 1.7%. Production in the Interior Basin is off slightly, decreasing slightly to 183.14 million short t from 183.55 million short t for the same period in 2014. Appalachian production fell for the period to 257.18 million short t from 268.20 million short t. Meanwhile, Western production is down to 526.28 million short t from 535.58 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 28 May 2015) stands at 36.23 million short t year-to-date, with 29.2 million short t produced underground and 7.03 million short t produced through surface operations. The number of mines reporting production increased by one to 127. The number of mines reporting production is subject to change as additional reports are submitted. The number of active miners working, however, decreased to 15 461 from 15 465 last week.

Underground operations had 12 572 direct mining employees, while surface operations fell to 2 889 employees. These numbers are also expected to change with additional reports.?

Coal production in Kentucky for the week ending 23 May was off sharply from the previous week and from the same period in 2014. Kentucky production for the week was reported at 1.16 compared to 1.24 million short t last week and 1.54 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 10.4%.? Meanwhile, coal production in Kentucky is off by 6.2% for the previous 52 weeks, with western Kentucky reporting a 6.0% decline and eastern Kentucky operations reporting a decline of 6.5% y/y.?

Wyoming coal production was down sharply for the week compared to 2014, coming in at 5.85 million short t, compared to 6.23 million short t the previous week. This is off substantially from the 7.31 million short t produced for the same week in 2014 – a decline of 20%. For the previous 52 weeks, Wyoming production is down 2.3%.

Illinois production also finished sharply lower for the week, coming in at 923 000 short t compared to 983 million short t for the same period in 2014. Indiana production is down as well, coming in at 580 000 short t compared to 746 000 short t for the week in 2014. Pennsylvania production for the week finished down slightly, to 1.02 million short t versus 1.21 million short t for the same week in 2014, but remains up 6.2% for the previous 52 weeks. Ohio production is off as well — dropping to 332 000 short t compared to 488 000 short t in 2014. Virginia production was also off this week – to 218 000 short t compared to 305 000 short t for the same week in 2014. Virginia production for the previous 52 weeks is off by 12.9%.?

Coal prices on the spot market fell slightly this week. Central Appalachian coal dipped 10 cents to US$52.75/short t or US$2.11/ million Btu. Northern Appalachian coal also dipped slightly to US$58.75/short t or US$2.27/million Btu. Illinois Basin coal prices dipped to 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 dipped to 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$44.53/short t, while Western Rail was selling at US$9.83/short t and Eastern Rail was selling at US$42.42/short t.

?Natural gas prices on the Henry Hub finished the week down 21 cents to US$2.78/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 875, down 10 from last week and down from 1866 a year ago – down 53.2%. 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.

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