Coal production up for second straight week


By T.L. HEADLEY, MBA, MAT, MA - For the Coal Valley News



CHARLESTON – Coal production in the U.S. for the week ending August 15 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 Energy Information Agency (EIA).

Production in the United States was up by 70,000 tons (.5%) to finish the week at 18.30 million tons compared to last week’s total of 18.23 million tons. Meanwhile, production for the week is off by 2.1 million tons (10.3%) from the 20.40 million tons for the same week in 2014. Cumulative production for the year-to-date remains sharply down as of August 15, coming in at 564.67 million tons compared to 618.46 million tons last year – a decline of 53.79 million tons or 8.7%. Production for the previous 52 weeks also trended lower – finishing at 943.21 million tons compared to 984.25 million tons for the same period ending in 2014 (-4.2%).

Mirroring the coal production, the number of coal rail car 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 tons compared to 1.77 million tons last week with a capacity utilization factor of 73.9%. However, steel production was down sharply from the same week last year, when 1.93 million tons were produced at a capacity utilization rate of 80.2%. Steel production continues its slide year-to-date – down 7.9% to 57.51 million tons produced compared to 62.41 million tons for the same period last year.

In terms of regional coal production, all three major basins were only slightly changed for the week ending August 15 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 tons, up from 4.75 million tons last week (.04%). Interior Basin production also finished slightly up at 3.53 million tons compared to 3.51 million tons last week (.05%). Western production finished the week higher at 10 million tons from 9.96 million tons 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 August 15, 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 tons from 183.44 million tons for the same period in 2014. Appalachian production fell for the period to 246.27 million tons from 267.47 million tons. Meanwhile, Western production is down to 517.57 million tons from 533.34 million tons in 2014.

According to the West Virginia Office of Miners’ Health Safety and Training, coal production in the state now stands at 58.79 million tons through August 20. Of that total, 46.87 million tons was mined by underground operations and 11.92 million tons was produced by surface 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 2,834 working on surface operations. The office does not report data for contract miners or preparation plant workers on a weekly basis.

According to EIA, West Virginia coal production for the week totaled 2.03 million tons compared to 2.02 million tons 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 August 1 was also compared to the previous week and remains down from the same period in 2014. Kentucky production for the week was reported at 1.30 million tons, up from 1.31 million tons last week but down from the 1.56 million tons for the same week in 2014. Both the eastern and western regions of Kentucky appear to have stabilized their production but the state continues to see significant declines in both fields year over year. Year to date, production in Kentucky is off by 16.0%. 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% year-over-year.

Wyoming coal production was also down for the week, coming in at 7.27 million tons, compared to 7.24 million tons the previous week, but down from the 8.05 million tons 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 1.20 million tons 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 tons 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 tons versus 1.13 million tons 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 tons compared to 376,000 tons 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 tons compared to 249,000 tons 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 $49.95 per ton or $2.00 per mmBtu. Northern Appalachian coal held at $52.25 per ton or $2.01 per mmBtu. Illinois Basin coal closed unchanged at $34.35 per ton or $1.46 per mmBtu, while Powder River Basin coal held at $11.55 per ton or $0.66 per mmBtu, and Uinta Basin coal prices were firm at $39.55 per ton or $1.69 per mmBtu.

Meanwhile, on the NYMEX Coal Futures board, Central Appalachian coal is down to $42.77 per ton compared to $42.88 per ton to last week, while Western Rail declined to $10.60 per short ton from $10.65 and Eastern Rail coal is up to $44.19 per short ton from $44.00 the previous week.

Natural gas prices on the Henry Hub rose 1 cent to finish the week at $2.88 per mmBtu. Natural gas producers again reported a significant increase in their stored reserves – up 65 billion cubic feet compared to the previous week, for a total of 2.98 trillion cubic feet 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 1,011 rigs from a year ago – down 55.5%. This number includes rigs working in both oil and gas plays.

By T.L. HEADLEY, MBA, MAT, MA

For the Coal Valley News

T.L. Headley works for the West Virginia Coal Association and he can be reached by email at [email protected]

T.L. Headley works for the West Virginia Coal Association and he can be reached by email at [email protected]

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