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Decline in US coal production for the week ending 15 May

Published by , Editor
World Coal,

T.L. Headley, West Virginia Coal Association.

According to the latest report from the Energy Information Agency (EIA) and the National Mining Association, coal production in the US continued to fall this past week. Production for the week ending 15 May was 14.2% below last year’s levels.

Production in the US is down by 2.66 million t for the week compared to the same period last year. Production for the week stood at 16.28 million t compared to 18.69 million t for the same week in 2014.

Cumulative production for the year-to-date decreased sharply for the week, finishing at 347.78 million t compared to 371.47 million t last year – a decline of 23.69 million t or 6.4%. Production for the previous 52 weeks also trended lower – finishing at 973.53 million t compared to 986.40 million t for the same period ending in 2014 (-1.3%).

The number of rail car loadings was also down sharply, finishing the week down 15.3% from the same period last year. Rail car loadings are also down sharply year-to-date – off 6.1% from the same period in 2014.

Electric output was down slightly – by 0.62% for the week ending 15 May – and also declined slightly (-0.3%) year-to-date. Steel output continued its decline, down 8.3% for the week, production finished at 1.71 million t, with a capacity utilisation factor of 72.1%, and it continues its slide year-to-date — down 7.2% to 33.21 million t produced compared to 35.79 million t for the same period last year. As noted in previous reports, production is a strong indicator of the status of the broader economy and the continued declines point to declines in durable goods orders and a softening of the national economy in the near- to mid-term.

In terms of regional coal production, all three major basins reporting essentially unchanged production from the previous week.? The Appalachian Basin held steady for the week – at 4.39 million t. Interior Basin production was also unchanged for the week – finishing at 3.02 million t. Western production decreased slightly this week, to 8.61 million t from 8.62 million t last week. All three basins continue to report significant declines in production year-to-date, with Appalachia down 7.8%, the Interior Basin off 5.8% and the Western Basin down 5.8%.

Looking at the previous 52 weeks, Appalachian and Western Basin production continued to be down for the period ending 15 May, declining 3.3% and 0.9% respectively. Meanwhile, production in the Interior Basin was up 0.4% for the period — increasing slightly to 184.21 million t from 183.52 million t for the same period in 2014. Appalachian production saw a decline for the period to 259.44 million t from 268.27 million t. Meanwhile, Western production is fell to 529.88 million t from 534.61 million t in 2014.

According to the West Virginia Office of Miners’ Health, Safety and Training, coal production in the state for 2015 (reported through 14 May 2015) stands at 33.31 million t year-to-date, with 27.01 million t produced underground and 6.29 million t produced through surface operations. The number of mines reporting production remained steady at 125. The number of mines reporting production is subject to change as additional reports are submitted. The number of active miners working ticked down, coming in at 15 512 compared to 15 624 last week. Underground operations had 12 604 direct mining employees, while surface operations finished up at 2 908 employees. These numbers are to change with additional reports.

Coal production in Kentucky for the week ending dropped to 1.23 million t compared to 1.51 for the same week in 2014, with the state seeing significant declines in both its eastern and western fields.

Meanwhile, coal production in Kentucky is off by 5.5% for the previous 52 weeks, with both western Kentucky and eastern Kentucky operations reporting declines of 5.5% year-over-year.

Wyoming coal production was also significantly down for the week compared to 2014, coming in at 6.22 million t, off from 7.18 million t – a decline of 13.4%. For the previous 52 weeks, Wyoming production declined 1.5%. Illinois production also finished sharply lower for the week, coming in at 982 000 t compared to 1.03 million t for the same period in 2014. Indiana production is down as well, coming in at 617 000 t compared to 734 000 t for the week in 2014. Pennsylvania production for the week decreased sharply to 1.09 million t versus 1.20 million t for the same week in 2014, but remains up 7.6% for the previous 52 weeks. Ohio production is off as well — dropping to 353 000 t compared to 479 000 t in 2014. Virginia production was also off this week – to 232 000 t compared to 300 000 t for the same week in 2014. Virginia production for the previous 52 weeks is off by 12.2%.

Coal prices on the spot market remained steady this week. Central Appalachian coal held at US$52.85 per t or US$2.11/million Btu. Northern Appalachian coal held at US$60.90 per t or US$2.34/million Btu. Illinois Basin coal prices were firm at US$40.45 per t or US$1.73/million Btu, while Powder River Basin coal remained steady at US$11.55 per t or US$0.66/million Btu and Uinta Basin coal prices were unchanged at US$39.30 per t or US$1.70/million Btu.Natural gas prices on the Henry Hub finished the week up 13 cents to US$2.88/million Btu. Natural gas producers again reported a significant increase in their stored reserves – up 111 billion ft3 compared to the previous week, for a total of 1.9 trillion ft3 in storage. This week’s working natural gas rotary rig count dropped to 885, from 888 last week and 1860 a year ago. 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.

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