US coal production rises for week ending 15 August

T.L. Headley, West Virginia Coal Association

Coal production in the US for the week ending 15 August rose for the second straight week, resuming a recent upward trend, but continues to fall short of last year, according to the latest report from the US Energy Information Agency (EIA).

Production in the US was up by 70 000 short t (.5%) to finish the week at 18.3 million short t compared to last week’s total of 18.23 million short t. Meanwhile, production for the week is off by 2.1 million short t (10.3%) from the 20.4 million short t for the same week in 2014. Cumulative production for the year-to-date remains sharply down as of 15 August, coming in at 564.67 million short t compared to 618.46 million short t last year – a decline of 53.79 million short t or 8.7%. Production for the previous 52 weeks also trended lower, finishing at 943.21 million short t compared to 984.25 million short t for the same period ending in 2014 (-4.2%).

?Mirroring the coal production, the number of coal railcar loadings declined, finishing the week down 10.6% from same week in 2014 – to 106 339 carloads from 118 954 carloads last year. Coal loadings also continued their decline year-to-date – off 9.5% from the same period in 2014.

Coal exports were not updated this week.

Electric output was up 5.8% compared to the same week in 2014, with 88.04 MWh of electricity produced compared to 83.23 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 1.5% from the previous week, coming in at 1.74 million short t compared to 1.77 million short t last week with a capacity utilisation factor of 73.9%. However, steel production was down sharply from the same week last year, where 1.93 million short t were produced at a capacity utilisation rate of 80.2%. Steel production continues its slide year-to-date – down 7.9% to 57.51 million short t produced compared to 62.41 million short t for the same period last year.

In terms of regional coal production, all three major basins were only slightly changed for the week ending 15 August compared to the previous week, but all continue sharply lower compared to the same week in 2014.

The Appalachian Basin finished at 4.77 million short t, up from 4.75 million short t last week (.04%). Interior Basin production also finished slightly up at 3.53 million short t compared to 3.51 million short t last week (.05%). Western production finished the week higher at 10 million short t from 9.96 million short t last week (.04%). Production remains sharply below the same week in 2014. The Appalachian Basin is off by 11.2% from the same week last year. The Interior Basin is off 10.7% from 2014. And Western production is off 9.8% from the same period in 2014.

All three basins also continue to report significant declines in production year-to-date with Appalachia down 12.4%, the Interior Basin off 7.6% and the Western Basin down 7.2%.

Looking at the previous 52 weeks, all three basins continue lower for the period ending 15 August, with the Appalachian Basin down 7.9%, the Interior Basin down 2.2% and the Western Region down 3.0%. Production in the Interior Basin fell to 179.37 million short t from 183.44 million short t for the same period in 2014. Appalachian production fell for the period to 246.27 million short t from 267.47 million short t. Meanwhile, Western production is down to 517.57 million short t from 533.34 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 58.79 million short t through 20 August. Of that total, 46.87 million short t was mined by underground operations and 11.92 million short t was produced by opencast mining. A total of 112 mines are now reporting production through June 2015.

According to WV OMHST, coal mining employment in West Virginia fell slightly to 15 069 total miners, with 12 235 working underground and 2834 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 totaled 2.03 million short t compared to 2.02 million short t for the previous week (.4%). Meanwhile, West Virginia production is off by 10.1% 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 17.5% respectively.

Coal production in Kentucky for the week ending 1 August was also compared to the previous week and remains down from the same period in 2014. Kentucky production for the week was reported at 1.3 million short t – up from 1.31 million short t last week but down from the 1.56 million short t for the same week in 2014. Both the eastern and western regions of Kentucky appear to have stabilised their production but the state continues to see significant declines in both fields y/y. Year to date, production in Kentucky is off by 16%. Meanwhile production in the state is off by 11.4% for the previous 52 weeks with western Kentucky reporting a 9.7% decline and eastern Kentucky operations reporting a decline of 13.1% y/y.

Wyoming coal production was also down for the week, coming in at 7.27 million short t compared to 7.24 million short t the previous week, but down from the 8.05 million short t produced for the same week in 2014 – a decline of 9.7%. For the previous 52 weeks, Wyoming production is down 2.3%.

Illinois production also finished unchanged at 1.2 million short t; the same as last week. Illinois production remains up by 11.8% for the previous 52 weeks. Indiana production came in at 693 000 compared to 690 000 short t for the same week in 2014. Indiana production is down by 6.6% over the previous 52 weeks. Pennsylvania production for the week was also up to just 1.14 million short t versus 1.13 million short t for the previous week, and production in the Keystone State is down slightly (-2.4%) for the previous 52 weeks.

Ohio production also finished slightly higher – at 377 000 short t compared to 376 000 short t the previous week. Ohio coal production is off 16.8% year-to-date and down 13.8% for the previous 52 weeks, compared to the same period ending in 2014. Virginia production increased slightly this week to 250 000 short t compared to 249 000 short t for last week. Virginia production year-to-date is off by 16.5% and down for the previous 52 weeks by 15.0%.?

Coal prices on the spot market held steady this week. Central Appalachian coal held at US$49.95/short t or US$2.00/million Btu. Northern Appalachian coal held at US$52.25/short t or US$2.01/million Btu. Illinois Basin coal closed unchanged at US$34.35/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$42.77/short t compared to US$42.88/short t to last week, while Western Rail declined to US$10.60/short t from US$10.65 and Eastern Rail coal is up to US$44.19/short t from US$44.00 the previous week.?

Natural gas prices on the Henry Hub rose 1 cent to finish the week at US$2.88/million Btu. Natural gas producers again reported a significant increase in their stored reserves – up 65 billion ft³ compared to the previous week, for a total of 2.98 trillion ft³ in storage. This week’s working natural gas rotary rig count is up by 1 from last week to 885 working rigs. However, the count remains down b 1011 rigs from a year ago – down 55.5%. 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/25082015/us-coal-production-rises-for-week-ending-15-august-2772/