Price pressure remains on US coal through June

Pressure remained on coal prices through June, according to a research note from SNL Energy, with a knock-on impact on coal production in all coal basins.

Prices for Central Appalachian (CAPP) coal dropped 6.5% on NYMEX, continuing a the downward spiral from April and May, while NYMEX PRB lost 2.5%, Illinois Basin OTC dropped 8.4% and Northern Appalachian (NAPP) physical marks took a 3 – 4% hit.

Production estimates for 2Q15 are much lower than 1Q15 with both bituminous and sub-bituminous coal affected: “The reflects retirements in coal-fired generation at the first deadline of the US EPA’s Mercury and Air Toxics Standards, or MATS, in April, ongoing weakness in electricity demand and competition from natural gas in the face of that demand,” wrote Steve Piper of SNL Energy.

“Improved seasonal demand and stable or growing natural gas pricing will provide for modest uplift but the overall headwinds are fierce,” Piper concluded.

Written by Jonathan Rowland.

Read the article online at: https://www.worldcoal.com/power/09072015/price-pressure-remains-on-us-coal-through-june-2539/