US Coal Market Update

Production – Total U.S. coal production for the week ending April 9 fell ~43% y/y to 10.2 mm tons setting a new record low, and ~7% below the trough experienced last week. Year-to-date production is now 91.7 mm tons, or ~33%, below the same period in 2015.

Pricing – International Pricing – The NW European thermal price increased ~6.5% to $46.50/mt after reaching recent lows of sub-$44/mt. The overseas price is still 22% lower y/y.

Coal-fired vs. Gas-fired Economics – CAPP coal remains out of the money as the eastern natural gas price trades near $1.75/mcf. The coal- fired fleet burning PRB coal is uneconomic at the current gas price.

Coal Carloads – Compared to the same week last year, average weekly Eastern carloads were down ~42% and Western carloads declined ~46%. Eastern carloads decreased ~15% w/w, while Western volumes fell ~3.5% compared to the previous week.

Steel Plant Utilization – For the week ending April 18, steel plant utilization gained ~2.5% to 72.4%.

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