Corsa Coal releases 1Q18 results

CEO of Corsa, George Dethlefsen, commented: “In the first quarter, Corsa made significant progress on its aggressive growth strategy. The first quarter was an outstanding quarter for export shipments and price realisations, as we grew our sales market share in both the international and domestic markets. Before adjusting for the sale of the Central Appalachia division, Corsa achieved record metallurgical coal sales volume levels in the quarter. We experienced strong growth in the quarter as compared to the first quarter of 2017 in each of our three business lines. Year over year, company produced tonnes increased by 23%, value added services purchased coal tonnes increased 128% and sales and trading tonnes increased 390% from its launch in the first quarter of 2017.”

“We continue to experience strong customer demand from our international customers, which has driven Corsa’s sales volume growth and profits from our purchased coal and blending activity. Domestically, steel prices are at seven year highs and the market for low volatile metallurgical coal is very tight owing to elevated demand from our customers.  Metallurgical coal prices remain at healthy levels, and the forward curve remains well supported through 2020.  While the spot price gets the most attention, calendar 2019 and 2020 forward prices have risen by 14% and 18% respectively since the beginning of this year. This supports the view that the seaborne market for metallurgical coal is expected to remain at profitable levels for a sustained period of time.”

First Quarter 2017 Sales Metrics

Corsa’s metallurgical coal sales in the first quarter of 2018 were 557 721 t, an increase of 89% from first quarter 2017 levels. A 15 month history of Corsa’s metallurgical coal sales volumes, adjusted for discontinued operations, is presented below.

Corsa’s metallurgical coal sales figures are comprised of three types of sales: (i) selling coal that Corsa produces; (ii) selling coal that Corsa purchases and provides value added services (storing, washing, blending, loading) to make the coal saleable (Valued Added Services); and (iii) selling coal that Corsa purchases on a clean or finished basis from suppliers outside the Northern Appalachia region (sales and trading). 

Coal Pricing Trends and Outlook

According to Corsa, strong global steel demand and corresponding high levels of steel production continue to support metallurgical coal prices in both domestic and export markets.  US steel trade actions and continued economic growth have led to higher domestic steel prices, increased blast furnace production and added demand for metallurgical coal. These drivers, as well as the limited availability of high quality, low volatile metallurgical coal, should support current price levels for 2018.

Export pricing remains favourable for the balance of 2018 with metallurgical coal prices indicative of a tightly balanced supply and demand relationship. First quarter seaborne metallurgical coal prices were lifted by logistical issues and weather concerns. These supply constraints eased into the beginning of the second quarter as railroads and ports approached normal operations, vessel queues were reduced, and mills worked through inventories on hand. However, most logistics systems have limited capacity for additional throughput so there will be minimal opportunity for additional supply to put downward pressure on prices in the near term. Chinese import restrictions, production policies and high production costs for metallurgical coal, along with increased steel production in India, continue to support pricing in the export market.

The NAPP Division’s geographic proximity to over 50% of domestic coke production capacity and short rail distance and multiple options to access the Maryland and Virginia export terminals solidify Corsa’s ability to serve both domestic and international customers. Corsa’s sales and trading platform gives them the ability to market a greater variety of products, access more users and respond to sales opportunities.

Read the article online at: https://www.worldcoal.com/coal/16052018/corsa-coal-releases-1q18-results/