CNX Coal Resources LP (CNXC) reported the strongest coal shipments since 1Q15 in the three months to the end of June 2016, according to its quarterly results announcement, as higher exports compensated for challenging domestic markets.
Quarterly coal sales were 1.2 million short t to 51 difference end users, up from 1.1 million short t to 39 different end users in 1Q16.
The company also said that it was fully contracted to the end of the year with expected sales of 5 million short t. Its 2017 sales volumes were 79% contracted, assuming a 5.2 million short t run rate.
“At the time of the IPO, we had a significant open position in our 2016 sales book while utility inventories were building and the price for coal was declining,” said Jimmy Brock, CEO of CNX Coal Resources GP LLC.
“Today we are fully sold out for 2016 and 79% sold for 2017. The shipment schedule is improving and for the first time we have an opportunity to optimise our customer mix.”
The quarter also saw the restart of the Harvey mine, which had been idled over winter as customer deferrals forced the company to reduce work schedule. Harvey is now running all five of its longwalls on a full five-day schedule.
CNXC was able to take advantage of an improvement in API2 prices, which are up 28% during 2Q16. The company exported 0.4 million short t in 2Q16, compared to 0.2 million short in the same quarter last year.
Additional business has also been booked for the remainder of the year and into 2017, although CNXC expects the share of exports in the sales mix to come down in 2H16 as shipments to US power plants pick up during the summer months and the railroads return from downtime.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/26072016/cnxc-reports-strongest-shipments-since-1q15-2016-2075/