CNX Coal Resources LP has announced that following the ongoing uncertainty in coal markets, it is reducing its expectations for 2016 coal sales to 4.4-5.2 million t compared to the previous expectations of 5.0-5.4 million t.
The reduction in the sales guidance range is in response further weakness in coal markets due to unusually warm winter weather and low natural gas prices impacting coal burn.
CNX Coal said that it is working with its customers and adjusting delivery schedules to improve operational consistency. These adjustments intensified towards the end of December 2015 and are negatively impacting the timing of the company’s planned sales.
Consistent with the company’s press release on 11 December 2015, they have a 2016 sold position of 4.8 million t. However, CNX Coal stated that given the ongoing uncertainty in the coal markets the actual average realisation may change from previously provided estimates depending on the customer mix, timing of shipments and other factors. The 2016 maintenance capital expenditure is currently expected to be in the US$24.5-US$27.5 million range.
Jimmy Brock, Chief Executive Officer of CNX Coal Resources GP, LLC, said: "These are extremely difficult times and one of the most challenging coal markets I have seen in my long tenure in the industry. We are working with our customers on delivery schedules and making the operational decisions we believe are necessary in this environment. Although the timing of shipments creates quarter to quarter volatility, we expect the committed tons will be shipped. In the meantime, our marketing team continues to seek opportunities for additional incremental sales to offset any delays from our contracted customers."
Edited from press release by Angharad Lock
Read the article online at: https://www.worldcoal.com/coal/06012016/cnx-coal-resources-updates-2016-outlook-1867/