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US coal production falls sharply for the week ending 4 July 2015

Published by , Editor
World Coal,


T.L. Headley, West Virginia Coal Association.

Coal production in the US fell sharply for the week ending July 4. The declines from last year steepened, with production off 16.6% from last year’s levels according to the latest report from the US Energy Information Agency (EIA) for the week.

Production in the US fell by 1.4 million short t (-9%) to finish the week at 14.15 million short t compared to last week’s total of 15.52 million short t. Production for the week is off by 2.8 million short t (16.6%) from the 16.96 million short t for the same week in 2014. Cumulative production for the year-to-date is also down sharply as of 4 July, coming in at 459 million short t compared to 501.05 million short t last year – a decline of 42.05 million short t or 8.4%. Production for the previous 52 weeks also trended lower, finishing at 955.33 million short t compared to 985.78 million short t for the same period ending in 2014 (-3.1%).

The number of coal railcar loadings also fell sharply, finishing the week off 18.6% from the same period last year. Railcar loadings also continued their decline year-to-date – off 9.3% from the same period in 2014.

Coal export/import data was not updated again this week.

Electric output was down 4% compared to the same week in 2014. With 80.24 MWh of electricity produced compared to 83.61 MWh produced for the same period last year.

Domestic steel output, however, continued its near freefall this week.

According to numbers from the American Iron and Steel Institute, domestic raw steel production was down 11.4% for the week, at 1.68 million short t, with a capacity utilisation factor of 71.2%, compared to the same week in 2014. Steel production also continues its slide year-to-date – down 7.6% to 45.24 million short t produced compared to 48.96 million short t for the same period last year.

In terms of regional coal production, all three major basins reported sharply lower results over the past week compared to the previous week, and all remain down sharply compared to the same week in 2014.

The Appalachian Basin finished at 3.76 million short t, sliding from 4.25 million short t last week (-11.6%). Interior Basin production also finished down at 2.71 million short t compared to 2.93 million short t last week (-7.6%). Western production finished the week at 7.69 million short t from 8.34 million short t last week (-7.8%). These numbers are sharply below the same week in 2014. The Appalachian Basin is off by 17.8% from the same week last year. The Interior Basin is off 16.2% from 2014. And Western production is off 16.1% from the same period in 2014.

All three basins also continue to report significant declines in production year-to-date, with Appalachia down 12.7%, the Interior Basin off 7% and the Western Basin down 6.7%.

Looking at the previous 52 weeks, all three basins are trending lower for the period ending 20 June, with the Appalachian Basin down 6.5%, the Interior Basin down 0.7% and the Western Region down 2.2%. Production in the Interior Basin fell to 181.76 million short t from 183.05 million short t for the same period in 2014. Appalachian production fell for the period to 249.87 million short t from 267.18 million short t. Meanwhile, Western production is down to 523.69 million short t from 535.56 million short t in 2014.

According to the West Virginia Office of Miners’ Health Safety and Training (WV OMHST), coal production in the state now stands at 44.05 million short t through 2 July. Of that total, 35.27 million short t was by underground operations and 8.78 million short t was produced by opencast mining. A total of 99 mines are now reporting production through May 2015.

According to WV OMHST, coal mining employment in West Virginia has now dropped to 15 296 total miners, with 12 459 working underground and 2 837 working on opencast 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 1.59 million short t compared to 1.78 million short t for the previous week (10.3%). This is off by 16.7% from the same week in 2014.?Production declined in both the northern and southern coalfields of West Virginia compared to last week, by 9.6% in the northern field and 10.8% 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 4 ending July was also down sharply compared to the previous week but remains down sharply from the same period in 2014. Kentucky production for the week was reported at 1.06 compared to 1.2 million short t last week and 1.34 million short t for the same week in 2014.

Both the eastern and western regions of Kentucky reported significant declines in production from the previous week and the state continues to see significant declines in both fields y/y. Year to date, production in Kentucky is off by 16.3%. Meanwhile production in the state is off by 9.6% for the previous 52 weeks with western Kentucky reporting an 8.1% decline and eastern Kentucky operations reporting a decline of 11.2% y/y.

Wyoming coal production was also down for the week compared to 2014, coming in at 5.58 million short t compared to 6.02 million short t the previous week. This is down from the 6.64 million short t produced for the same week in 2014 – a decline of 16%. For the previous 52 weeks, Wyoming production is down 1.8%.

Illinois production remains down, finishing the week at 921 000 short t compared to 973 000 short t last year. However, Illinois production is up by 13.8% for the previous 52 weeks. Indiana production is down as well, coming in at 539 000 short t compared to 655 000 short t for the week in 2014. Indiana production is also down by 6.1% over the previous 52 weeks. Pennsylvania production for the week finished down sharply to just 889 000 million short t versus 1.04 million short t for the same week in 2014. It is now down slightly (0.1%) for the previous 52 weeks.

Ohio production is off as well – at 302 000 short t compared to 381 000 short t in 2014. Ohio coal production is off 13.3% for the previous 52 weeks, compared to the same period ending in 2014. Virginia production fell sharply this week – to just 199 000 short t compared to 254 000 short t for the same week in 2014 (-21.7%). Virginia production for the previous 52 weeks is off by 14.2%.

Coal prices on the spot market edged higher across the board this week. Central Appalachian coal rose slightly from more than US$1 to US$54.80/short t or US$2.19/million Btu. Northern Appalachian coal jumped by US$1.15 to come in at US$58.75/short t or US$2.23/million Btu. Illinois Basin coal added 40 cents to close at US$40.85 per short t or US$1.73/million Btu, while Powder River Basin coal added 55 cents to close at US$12.10/ short t or US$0.69/million Btu andUinta Basin coal prices added 25 cents to finish at US$39.35/short t or US$1.68/million Btu.

Meanwhile, on the NYMEX Coal Futures board, Central Appalachian coal was trading at US$40.82/short t while Western Rail was selling at US$10.05/short t and Eastern Rail was selling at US$41.33/short t.

Natural gas prices on the Henry Hub finished the week down at US$2.79/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 2.58 trillion ft3 in storage. This week’s working natural gas rotary rig count remained at 863 up by one from last week and down by 1012 rigs from a year ago – down 54%. This number includes rigs working in both oil and gas plays.

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/13072015/us-coal-production-falls-sharply-for-the-week-ending-4-july-2015-2548/

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