US coal production continues growth for week ending 29 August

T.L. Headley, West Virginia Coal Association

Coal production in the US for the week ending 29 August rose for the fourth straight week, continuing a long-term upward trend, and to narrow the gap to last year’s totals significantly in recent weeks, according to the latest report from the US Energy Information Agency (EIA).

Production in the US was up by 240 000 short t (1.3%) to finish the week at 18.70 million compared to last week’s total of 18.46 million short t. Meanwhile, production for the week is off by 888 000 short t (4.6%) from the 19.59 million short t for the same week in 2014.

Cumulative production for the year-to-date remains sharply down as of 29 August, coming in at 601.83 million short t compared to 657.93 million short t last year – a decline of 56.1 million short t or 8.5%. Production for the previous 52 weeks also continues lower from last year, finishing at 941.01 million short t compared to 982.52 million short t for the same period ending in 2014 (-4.2%).

Mirroring the coal production, the number of coal railcar loadings remains down from last year, finishing the week at 108 710 cars, off 4.6% from same week in 2014. Coal loadings also continued their decline year-to-date – off 9.2% from the same period in 2014.?

Coal exports were not updated this week.

Electric output was down 4.1% compared to the same week in 2014, with 83.47 MWH of electricity produced compared to 87.03 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 2.2% from the previous week, coming in at 1.7 million short t compared to 1.74 million short t last week, with a capacity utilisation factor of 71.2%. However, steel production was down sharply from the same week last year, when 1.93 million short t were produced at a capacity utilisation rate of 80.2%. Steel production continues its slide year-to-date – down 8% to 59.23 million short t produced compared to 64.34 million short t for the same period last year.

In terms of regional coal production, all three major basins reported modest gains for the week ending 29 August compared to the previous week, but all continue sharply lower compared to the same week in 2014.

The Appalachian Basin finished at 4.88 million short t, up from 4.81 million short t last week (1.4%). Interior Basin production also finished slightly up at 3.61 million short t compared to 3.56 million short t last week (1.4%). Western production finished the week higher at 10.22 million short t from 10.09 million short t last week (1.3%). However, production remains sharply below the same week in 2014. The Appalachian Basin is off by 6% from the same week last year. The Interior Basin is off 4.8% from 2014. And Western production is off 3.8% from the same period in 2014.

All three basins also continue to report significant declines in production year-to-date, with Appalachia down 12.1%, the Interior Basin off 7.5% and the Western Basin down 7%.

Looking at the previous 52 weeks, all three basins continue lower for the period ending 29 August, with the Appalachian Basin down 8.1%, the Interior Basin down 2.4% and the Western Region down 2.9%. Production in the Interior Basin fell to 178.93 million short t from 183.36 million short t for the same period in 2014. Appalachian production fell for the period to 245.54 million short t from 267.25 million short t. Meanwhile, Western production is down to 516.53 million short t from 531.92 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 60.12 million short t through 27 August. Of that total, 47.78 million short t was mined by underground operations and 12.34 million short t was produced by surface mining. A total of 90 mines are now reporting production through July 2015.

According to WVOMHST, coal mining employment in West Virginia fell slightly to 15 052 total miners, with 12 226 working underground and 2826 working on surface 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 2.07 million short t compared to 2.05 million short t for the previous week (-1%). Meanwhile, West Virginia production is off by 4.5% from the same week in 2014.

Production was up in both the northern and southern coalfields of West Virginia compared to last week, by .04% and .02% respectively. However, production is off in both areas year-to-date by 1.1% and 1.2% respectively.

Coal production in Kentucky for the week ending 29 August was also up compared to the previous week and remains down from the same period in 2014. Kentucky production for the week was reported at 1.37 million short t, up from 1.35 million short t last week but down from the 1.52 million short t for the same week in 2014. The eastern and western regions of Kentucky but the state appear to again be seeing significant declines y/y. Year to date, production in Kentucky is off by 15.7%. Meanwhile production in the state is off by 11.7% for the previous 52 weeks, with western Kentucky reporting a 10% decline and eastern Kentucky operations reporting a decline of 13.5% y/y.

Wyoming coal production was up for the week, coming in at 7.43 million short t, compared to 7.33 million short t the previous week, but down from the 7.72 million short t produced for the same week in 2014 – a decline of 3.8%. For the previous 52 weeks, Wyoming production is down 2.2%. Illinois production also finished slightly up at 1.23 million short t compared to 1.22 million short t last week. Illinois production is up by 11.5% for the previous 52 weeks.

Indiana production came in at 708 000 compared to 699 000 short t for the same week in 2014. Indiana production is down by 6.5% over the previous 52 weeks. Pennsylvania production for the week was also slightly up to 1.16 million short t versus 1.15 million short t for the previous week, and production in the Keystone State is down slightly (-2.9%) for the previous 52 weeks.

Ohio production also ticked slightly higher – at 386 000 short t compared to 381 000 short t the previous week. Ohio coal production is off 16.4% year-to-date and down 13.7% for the previous 52 weeks, compared to the same period ending in 2014. Virginia production increased slightly this week – to 255 000 short t compared to 252 000 short t for last week. Virginia production year-to-date is off by 16.2% and down for the previous 52 weeks by 14.9%.

Coal prices on the spot market were mixed this week. Central Appalachian coal rose to US$4/short t or US$1.94/million Btu. Northern Appalachian coal also fell, coming in at US$51.90/short t or US$2.00/million Btu. Illinois Basin coal closed unchanged at US$39.75/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$39.55/short t or US$1.69/million Btu.

Meanwhile, on the NYMEX Coal Futures board, Central Appalachian coal is down to US$42.95/short t compared to US$42.92.short t to last week, while Western Rail rose to US$10.58/short t from US$10.56 and Eastern Rail coal is up to US$44.30/short t from US$43.83 the previous week.

Natural gas prices on the Henry Hub fell 19 cents to finish the week at US$2.69/million Btu. Natural gas producers again reported a significant increase in their stored reserves – up 69 billion ft³ compared to the previous week, for a total of 3.10 trillion ft³ in storage. This week’s working natural gas rotary rig count is down by 13 from last week to 864 working rigs and the count remains down by 1061 rigs from a year ago – a decline of 55.2%. 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.

Read the article online at: https://www.worldcoal.com/coal/07092015/us-coal-production-continues-growth-for-week-ending-29-august-2820/