Friday, August 3, 2018 COAL TRADER www.platts.com www.twitter.com/PlattsCoal NEWS HEADLINES Oxbow sale unlikely to impact Long Beach terminal One of only two export facilities on US West Coast Delaware court orders sale after investor lawsuit (continued on page 5) Foresight sales jump 21.3% on year, prod down 4.3% Company sold 5.87 million st in Q2, up 21.3% on year Production fell 4.3% on year due to two longwall moves (continued on page 6) PLATTS DAILY PHYSICAL OTC ASSESSMENTS, AUG 3 Prompt month price Symbol Btu/lb Mode $/st Change CAPP rail (CSX) OTC CAKM001 12,500 Rail 65.10 0.00 PRB 8,800 OTC CTAM001 8,800 Rail 12.40 0.00 PRB 8,400 OTC CTBM001 8,400 Rail 8.90 0.00 IB 11,800* OTC CTPM001 11,800 Barge 43.65 0.00 *Maximum 0.35% chlorine. See Platts Methodology and Specifications Guide at Platts.com for details. PLATTS DAILY PHYSICAL ASSESSMENTS, AUG 3 Prompt price Symbol Kcal/kg Basis $/mt Change CIF ARA CSARM01 6,000 NAR 94.05 -0.20 NYMEX HENRY HUB NATURAL GAS FUTURES, AUG 3 Prompt price Symbol $/MMBtu Change Henry Hub NMNG001 2.853 +0.037 CANADA MEXICO UNITED STATES Pacific Ocean Gulf of Mexico Atlantic Ocean PLATTS DAILY PHYSICAL OTC ASSESSMENTS ($/st) Source: S&P Global Platts PRB 8,800 PRB 8,400 IB 11,800 CAPP rail (CSX) Sep 18 12.40 0.00 Q4 18 12.40 0.00 Sep 18 8.90 0.00 Q4 18 8.95 0.00 Sep 18 43.65 0.00 Q4 18 43.25 0.00 Sep 18 65.10 0.00 Q4 18 65.05 0.00 CIF ARA VS CAPP RAIL CSX Source: S&P Global Platts 60 70 80 90 100 110 Aug-18 Jun-18 Apr-18 Feb-18 Dec-17 Oct-17 Aug-17 CIF ARA 6000 kcal/kg NAR ($/mt) CAPP rail (CSX) 12,500 Btu/lb ($/mt) 60 80 100 120 2021 2020 2019 Q3-19 Q2-19 Q1-19 Q4-18 Oct-18 Sep-18 ($/mt) FOB Newcastle CIF ARA PLATTS FORWARD CURVE COAL, AUGUST 3 Graph created using Platts Forward Curve – Coal data. ■ CSX October bid-offer heard $62.55/st-$66/st ■ Power burn demand drops 1.8 Bcf week on week Houston—Only one bid for front-month Powder River Basin coal was heard in the US over-the-counter market Friday. A broker reported a bid for September-delivery physical PRB 8,800 Btu/lb coal at $12.25/st, 10 cents lower than a bid heard Thursday. Only one bid a day, and no offers, were heard for PRB 8,800 Btu/lb coal on Thursday and Friday. The past two days are the first since May 15 to see no offers, just bids. On May 15, five bids and no offers were reported. S&P Global Platts assessed physical PRB 8,800 Btu/lb coal for September delivery at $12.40/st on Friday, unchanged from Thursday, Bids heard for PRB, CSX coal; power burn demand expected to rise (continued on page 4) EDITOR’S NOTE The weekly Coal Trader Analytics supplement did not publish Friday due to a production issue. The supplement is expected to publish next week.
Transcript
Friday, August 3, 2018
COAL TRADER
www.platts.com www.twitter.com/PlattsCoal
News HeadliNes
Oxbow sale unlikely to impact long Beach terminal�� One of only two export facilities on US West Coast�� Delaware court orders sale after investor lawsuit
(continued on page 5)
Foresight sales jump 21.3% on year, prod down 4.3%�� Company sold 5.87 million st in Q2, up 21.3% on year�� Production fell 4.3% on year due to two longwall moves
Graph created using Platts Forward Curve – Coal data.
�■ csX October bid-offer heard $62.55/st-$66/st�■ Power burn demand drops 1.8 Bcf week on week
Houston—Only one bid for front-month Powder River Basin coal was heard in the US over-the-counter market Friday.
A broker reported a bid for September-delivery physical PRB 8,800 Btu/lb coal at $12.25/st, 10 cents lower than a bid heard Thursday.
Only one bid a day, and no offers, were heard for PRB 8,800 Btu/lb coal on Thursday and Friday. The past two days are the first since May 15 to see no offers, just bids. On May 15, five bids and no offers were reported.
S&P Global Platts assessed physical PRB 8,800 Btu/lb coal for September delivery at $12.40/st on Friday, unchanged from Thursday,
Bids heard for PRB, csX coal; power burn demand expected to rise
(continued on page 4)
editOR’s NOte
The weekly Coal Trader Analytics supplement did not publish Friday due to a production issue. The supplement is expected to publish next week.
Platts daily PHysical cOal assessmeNts, aug 3 ($/st) aug final sep daily sep daily av. Q3 final Q4 daily Q4 daily av.coal product specifications monthly av. assessment average change average assessment average change
15-Jun CFR India 6900 NAR Unknown August Trade 110+
06-Jun CFR India 6900 NAR Unknown July Offer 107.00
01-Jun FOB Baltimore 6900 NAR Unknown July Offer 82.75
Platts daily PHysical BeNcHmaRK assessmeNt RatiONalescaPP Rail (csX) Otc: S&P Global Platts assessed physical CAPP rail (CSX) coal for September delivery at $65.10/st Friday, unchanged from Thursday, based on indications of value of $65.10/st and $65.15/st. The initial market value of $65.10/st was tested in the market through 2:30 pm, and no data was excluded from the assessment.
This rationale applies to symbol(s) CAKM001
PRB 8,800 Otc: S&P Global Platts assessed physical PRB 8,800 Btu/lb coal for September delivery at $12.40/st Friday, unchanged from Thursday, based on two indications of value of $12.40/st. The initial market value of $12.40/st was tested in the market through 2:30 pm, and no data was excluded from the assessment.
This rationale applies to symbol(s) CTAM001
iB 11,800 Otc: S&P Global Platts assessed physical IB 11,800 Btu/lb coal for September delivery at $43.65/st Friday, unchanged from Thursday, based on indications of value of $45/st and $42/st. The initial market value of $43.65/st was tested in the market through 2:30 pm, and no data was excluded from the assessment.
NymeX sept. gas increases as storage concerns grow
Houston—NYMEX September natural gas futures increased Friday, up 3.7 cents to settle at $2.853/MMBtu, with the market feeling upward pressure as supply concerns become more imminent going to the winter months.
The front-month contract traded Friday between $2.814/MMBtu and $2.862/MMBtu.
US dry gas production is expected to fall 100 MMcf day on day to 79.9 Bcf on Friday, the third consecutive day that dry gas output has been beneath 80 Bcf, according to S&P Global Platts Analytics.
US dry gas production is at record levels but recent power burn demand is inhibiting its impact on reducing the US storage deficit. Total stocks are 688 Bcf less than inventories a year ago and 565 Bcf under the five-year average, according to US Energy Information Administration data.
The market seems to be reacting to supply concerns, sources say, with the front-month increasing about 10 cents over the past two trading days.
A fourth straight lower-than-expected storage injection in the week that ended July 27 is due to the market underestimating exports to Mexico, according to Platts Analytics.
Exports to Mexico are averaging 4.4 Bcf/d so far this year, 300 MMcf/d above exports in the same period last year, according to Platts Analytics.
The North American gas market is transforming as exports to Mexico and LNG shipments are only going to increase and put further pressure on the market.
That said, China is threatening to impose a 25% import duty on US LNG, which would be bearish for prices as gas could possibly be stranded in the US if the record production levels persist.
Total US demand on Friday — including exports to Mexico and LNG exports — is set to fall 800 MMcf to 76.5 Bcf, led primarily by a fall in power burn, according to Platts Analytics.
Netbacks ($/st)FOB US East Coast COUSC00 12,500 Btu/lb GAR 1.0% 82.46 +0.56FOB US Gulf Coast COUGU00 11,500 Btu/lb GAR 2.9% 61.49 +0.50FOB Vancouver COVCU00 8,800 Btu/lb GAR 0.8% 51.68 -0.39
scant spot tons supporing atlantic met coal prompt and forward pricing
London—Atlantic metallurgical coal prices Friday were supported by scant spot tonnage out of the US East Coast and higher forward pricing in futures contracts settling later this year.
Several factors shaping seaborne met coal demand at the end of the week, with China’s stiffer environmental curbs on steel operations for later this year, and its plan for wider trade tariffs against the US in the headlines.
In Japan, potential for some pushbacks on met coal volumes due to flooding disruption at steel mills earlier in July was described as not having materialized as feared by suppliers, limiting need to find new buyers.
This week, source said availability of US high-vol B was rising, although September positions may be the earliest for which FOB volumes can be offered.
Arch Coal’s Mountain Laurel mine in West Virginia saw the longwall start up at a new panel in early June. Since then, the high-vol B mine “has seen much-improved longwall performance when compared to
based on two indications of value of $12.40/st. The initial market value of $12.40/st was tested in the market through 2:30 pm EDT, and no data was excluded from the assessment.
Central Appalachian (CSX) rail coal saw a bid and offer on Friday for October delivery at $62.55/st-$66/st.
Three bid and offers have been reported since July 26. Before then, no bid and offer had been heard since June 3 when three were seen.
September only saw broker-reported indications of $65.10/st and $65.15/st.
Platts assessed physical CSX rail coal for front-month delivery at $65.10/st on Friday, based on the indications of value. The initial market value was tested in the market, and no data was excluded.
September Illinois Basin coal heard indications of $45/st and $42/st.Indications continue to creep upwards from a low of $38.90/st at
the end of April and beginning of May.Platts assessed front-month IB 11,800 Btu/lb coal at $43.65/st Friday,
based on the reported indications. The initial value of $43.65/st was tested in the market, and no data was excluded from the assessment.
In 2018, only March and January have seen bids and offers reported for IB 11,800 Btu/lb coal.
Meanwhile, the front-month NYMEX Henry Hub natural gas futures contract rose 3.7 cents Friday to $2.853/MMBtu.
US power burn demand dropped 1.8 Bcf/d to an average of 34.8 Bcf/d in the week that ended August 3 as temperatures fell across the US. With temperatures expected to rise next week, power demand is forecast to rise as well.
— Olivia Kalb
maRKet cOmmeNtaRy
Bids heard for PRB, csX coal; power burn demand expected to rise...from page 1
NeRc Region sep-18 departure Oct-18 departure from normal from normalWECC 218 +13% 106 +34%SPP 256 +9% 13 -10%SERC 312 +8% 70 +20%RFC 100 +17% 0 0%NPCC 137 +25% 0 0%MRO 96 +17% 0 -99%FRCC 524 +2% 392 +1%ERCOT 468 +5% 198 +9%Note: Heating Degree Days run September 1 to April 30, Cooling Degree Days run May 1 to August 31
Source: CustomWeather
daily csaPR allOwaNce assessmeNts, aug 3 ($/st) symbol 2018 change symbol 2019 changeNOx Annual ENOXY01 2.00 0.00 ENOXY02 2.00 0.00NOx Seasonal ENOXS01 270.00 0.00 ENOXS02 270.00 0.00SO2 Group 1 ESO21Y1 2.50 0.00 ESO21Y2 2.50 0.00SO2 Group 2 ESO22Y1 3.00 0.00 ESO22Y2 3.00 0.00
MONTH�AHEAD TEMPERATURE FORECAST MAP
Source: S&P Global Platts, Custom Weather
COAL-vs-GAS $/MWh FUEL COST RATIOS
The Platts coal-vs-gas fuel cost ratios indicate the regional competitiveness of gas versus coal for power generation. The ratio is calculated by dividing the $/MWh fuel cost for coal by that of gas. Gas generation is cheaper than coal generation when the ratio is greater than one. All price data re�ects prompt month fuel contracts.
Source: S&P Global Platts daily OTC coal prices and M2MS gas prices
0.6
0.8
1.0
1.2
1.4
01-Aug03-Jul05-Jun07-May09-Apr09-Mar07-Feb
1.6Into Southern PJM West MISO IndSPP South ERCOT North Threshold
the previous panel, and geologic and operating conditions have been consistent with company expectations,” the St Louis-based company said in an update this week.
Indian demand growth is compensating for lower Chinese imports, and US miners have been increasing exports to India.
Platts assessment of US East Coast low-vol hard coking coal rose 50 cents to $165.50/mt FOB, based on 58% CSR, and 19% volatile matter specifications.
Platts US high-vol A index remained at the week’s high of $174/mt FOB USEC, based on 32% volatile matter, 1.1% reflectance straight coal, with low ash and sulfur and CSR typically in the low 60s.
Platts US high-vol B assessment was stable at $155/mt FOB USEC, based on 34% VM unblended product.
The Australian Premium Low Vol net forward assessment rose 20 cents to $190.45/mt CFR Rotterdam.
met coal futuresIn the futures market, 73,000 mt was cleared on the SGX at the
Asian close, with 20,000 mt overnight. Volumes were concentrated in the first four months.
The Q4 settlement price was up $1.33 at $185.67/mt, with August up $1 at $180/mt and September at $182/mt, up $2, and October rising $2 to $184/mt.
The contango from August to December remained at $7/mt.Platts TSI Premium Hard Coking Coal reference price, used for
settlement of SGX’s coking coal futures, remained at $173.10/mt FOB Australia.
— Hector Forster
SEABORNE COKING COAL
Source: S&P Global Platts
($/mt)
100
150
200
250
300
Aug-18Jun-18Apr-18Feb-18Dec-17Oct-17Aug-17
Premium Low Vol Hard Coking Coal FOB AustraliaLow Vol Hard Coking Coal FOB USECHigh Vol A FOB USECHigh Vol B FOB USEC
News
long Beach terminal exports expected stable as Oxbow carbon ordered to be sold
Houston—Few changes are expected in petroleum coke and coal exports at the Oxbow Carbon’s Long Beach, California, terminal after owner William Koch was ordered to sell his company, market sources said Friday.
“Just because ownership changes doesn’t mean the mission or business changes,” a market source said. “It’s a professional company.
Platts weeKly metalluRgical cOal RelatiVities taBle august 3, 2018 csR Vm tm ash s P Fluidity Vit % august 3, FOB spread d ar d d d ddpm Hampton Roads vs us lV
Oak Grove 70.5 21.75 8 9.3 0.56 900 65.2 177.00 106.95%
Blue Creek No. 7 72 21 9 9.75 0.8 0.04 1,100 69.6 177.00 106.95%
Blue Creek No. 4 66 25.25 9 9.75 0.8 0.035 12,000 69 172.50 104.23%
August 3 Panamax freight rates. Hampton Roads to Rotterdam = $12.25/mt, Hampton Roads to Brazil = $12.00/mt, Mobile to Rotterdam = $14.25/mt.
d = dry; ar = as received; CSR = coke strength after reaction; ddpm = dial divisions per minute. *assumes inherent moisture of 2% for ad/d conversion.
For further information about this data please contact [email protected]
Source: S&P Global Platts
People rely on Oxbow, know Oxbow’s reliable; it has strong credit. Whoever buys it will put their own corporate imprint.”
Koch, brother of conservative billionaire political donors David and Charles Koch, is being made to sell the company and pay an unspecified amount of damages to two private equity firms after rejecting a buyout offer from private equity firm ArcLight Capital Partners LLC in 2016, according to a ruling by the Delaware Chancery Court issued Wednesday.
Judge Travis Laster ruled Koch broke the Reasonable Efforts Clause in investor agreements with the two private equity firms by “seeking to disrupt, derail, and delay an exit sale.” According to the ruling, damages “must take into account the lost value of the ArcLight offer, including the lost time value of not receiving the consideration by September 30, 2016.” The ruling was made in order to recover the more than $150 million in investments from the two private equity firms.
A monitor has been assigned to ensure Koch follows through with the sale.
One of the US’ largest privately held companies and one of the biggest producers of petroleum coke for aluminum production, Oxbow did not respond to a request for comments.
With a capacity of 733,000 st in six enclosed storage facilities, the Pier G at the Port of Long Beach terminal has a throughput of 7 million st/year through its terminal.
The Long Beach terminal shipped 5 million mt of non-calcined petcoke and 1 million mt of coal in 2017, according to US Census data. Year to date, 2 million mt of non-calcined petcoke and 517,000 mt of coal have been exported through the terminal.
With “few options to export for a Western producer,” Oxbow’s terminal is an important option for coal exports, said Joe Aldina, analyst at S&P Global Platts Analytics.
With exports off the US West Coast limited to Oxbow’s terminal in Long Beach and another small terminal in Stockton, California, producers are forced to go through Canada and Mexico.
When it comes to buyers of Oxbow, “several companies could be interested. The question is if it’s $2 billion or $4 billion,” said the market source.
The source said he has not heard of any interested buyers.“Anyone in the US putting tonnage into the seaborne market, as
long as that lasts, the terminal will make money,” said Aldina.
“Whoever owns Long Beach will continue.”If anything, the person to watch would be Koch since he “is very
independent. He could break up the company and sell it to ten different people. I mean, there’s no predicting,” the market source said. “It depends who buys – how long he stalls…it’s very unpredictable. Could go multiple directions, but I don’t see any significant or substantial changes expected.”
Oxbow owned Elk Creek mine in Colorado, once one of the most productive coal mines in Colorado, but it was abandoned in 2013 after a fire forced a shutdown.
“In the past when terminals sold we haven’t seen any major changes to business,” Aldina said. “Still a fairly simple business, not that they don’t have risk.”
— Olivia Kalb
Foresight energy coal sales jump 21.3% on year, production down 4.3%
�■ company sold 5.87 million st in Q2, up 21.3% on year�■ Production fell 4.3% on year due to two longwall moves
Houston—Foresight Energy’s coal sales jumped 21.3% year on year in the second quarter of 2018, despite production falling 4.3%, the US coal producer said Friday.
The St. Louis-based company, which operates solely in the Illinois Basin, reported sales of 5.87 million st, up 21.3% from 4.84 in the year-ago quarter and also 12% higher than 5.24 million st sold in the first quarter, due to a strong export market.
Coal sales averaged $46.02/st, up 1.2% from $45.49/st in the previous quarter and up 8.8% from $42.30/st in the year-ago quarter.
Of the total coal sales, 2.1 million st, or 36% of the total volumes in Q2 were sold into the export market, up from 1.7 million st, or 33% in Q1.
“The export demand for our product remains strong and has acted to pull considerable amount of volume out of the domestic thermal market. As a result, we have observed the domestic supply and demand levels moving to balance,” President and CEO Rob Moore said during an earnings call.
For 2018, Moore said the company is expected to export at least
Officers of the Corporation: Charles E. Haldeman, Jr., Non-Executive Chairman; Doug Peterson, President and Chief Executive Officer; Ewout Steenbergen, Executive Vice President, Chief Financial Officer; Steve Kemps, Executive Vice President, General Counsel
Managing Editor, US CoalAndrew Moore, +1-713-655-2295, [email protected]
To reach Platts: E-mail: [email protected]; North America: Tel:800-PLATTS-8; Latin America: Tel:+54-11-4121-4810; Europe & Middle East: Tel:+44-20-7176-6111; Asia Pacific: Tel:+65-6530-6430
The names “S&P Global Platts” and “Platts” and the S&P Global Platts logo are trademarks of S&P Global Inc. Permission for any commercial use of the S&P Global Platts logo must be granted in writing by S&P Global Inc.
You may view or otherwise use the information, prices, indices, assessments and other related information, graphs, tables and images (“Data”) in this publication only for your personal use or, if you or your company has a license for the Data from S&P Global Platts and you are an authorized user, for your company’s internal business use only. You may not publish, reproduce, extract, distribute, retransmit, resell, create any derivative work from and/or otherwise provide access to the Data or any portion thereof to any person (either within or outside your company, including as part of or via any internal electronic system or intranet), firm or entity, including any subsidiary, parent, or other entity that is affiliated with your company, without S&P Global Platts’ prior written consent or as otherwise authorized under license from S&P Global Platts. Any use or distribution of the Data beyond the express uses authorized in this paragraph above is subject to the payment of additional fees to S&P Global Platts.
S&P Global Platts, its affiliates and all of their third-party licensors disclaim any and all warranties, express or implied, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use as to the Data, or the results obtained by its use or as
to the performance thereof. Data in this publication includes independent and verifiable data collected from actual market participants. Any user of the Data should not rely on any information and/or assessment contained therein in making any investment, trading, risk management or other decision. S&P Global Platts, its affiliates and their third-party licensors do not guarantee the adequacy, accuracy, timeliness and/or completeness of the Data or any component thereof or any communications (whether written, oral, electronic or in other format), and shall not be subject to any damages or liability, including but not limited to any indirect, special, incidental, punitive or consequential damages (including but not limited to, loss of profits, trading losses and loss of goodwill).
ICE index data and NYMEX futures data used herein are provided under S&P Global Platts’ commercial licensing agreements with ICE and with NYMEX. You acknowledge that the ICE index data and NYMEX futures data herein are confidential and are proprietary trade secrets and data of ICE and NYMEX or its licensors/suppliers, and you shall use best efforts to prevent the unauthorized publication, disclosure or copying of the ICE index data and/or NYMEX futures data.
Permission is granted for those registered with the Copyright Clearance Center (CCC) to copy material herein for internal reference or personal use only, provided that appropriate payment is made to the CCC, 222 Rosewood Drive, Danvers, MA 01923, phone +1-978-750-8400. Reproduction in any other form, or for any other purpose, is forbidden without the express prior permission of S&P Global Inc. For article reprints contact: The YGS Group, phone +1-717-505-9701 x105 (800-501-9571 from the U.S.).
For all other queries or requests pursuant to this notice, please contact S&P Global Inc. via email at [email protected].
Coal Trader is published every business day by Platts, a division of S&P Global, registered office: 20 Canada Square, Canary Wharf, London, E14 5LH.
*Price change from previous week. **High chlorine (max 0.35%)
8.5 million st, including 7.7 million st that is contracted and priced, up from 6.7 million st after the end of Q1. Moore said the company has a potential to export 9 million st “with pricing of the incremental volumes to be set at the time of delivery to the export terminal.”
Total sales for 2018 is expected between 22 million and 22.8 million st, up from 21.5 million-22.8 million st estimated after Q1.
Foresight’s production fell to 5.42 million st in Q2, down 4.3% from 5.66 million st produced in the year-ago quarter, due to two longwall moves at its Sugar Camp complex.
Cash cost per ton sold in the second quarter averaged $23.70/st, up 2.2% from $23.19/st in Q1 and up 8.3% from $21.88/st in Q2 2017, due to the longwall moves, as well as higher royalty expenses.
Netback to mine realization per ton sold was decreased to $35.96/st, 1.8% lower than $36.63/st in the first quarter and down 1.3% from $36.45/st in the year-ago quarter.
Transportation costs for Foresight increased by $30.7 million to $59 million in Q2, due to a higher proportion of its sales shipped into the export market.
The company generated coal sales revenues of $270 million in Q2, up 32 % from $207.1 million in the year-ago quarter, but reported a net loss of $29.22 million, compared with a net loss of $21.57 million in the previous quarter and a loss of $16.28 million in Q2 2017.
Foresight ended the quarter with $38.8 million in cash.— Tyler Godwin
us coal exports again move higher in June: census data
Houston—US coal exports totaled 9.2 million mt in June, up 5.1% from May and up 38.6% from the same month a year ago, according to US Census data out Friday.
Relatively high seaborne prices for both metallurgical and thermal coal, in addition to a possible ban on petcoke in India, have opened the door for US exports.
US coal exports through June totaled 52.7 million mt, up 31.7% compared with the same period a year ago, while exports on an annualized basis would total 105.4 million mt, the highest total since 2012.
Met coal exports in June totaled 4.97 million mt, down 1.7% from the prior month, but up 28.1% from the year-ago month.
Top met coal export destinations in June were India, at 711,185 mt compared with 301,485 mt in the year-ago month; Brazil, at 528,492 mt compared with 372,321 mt; and the Netherlands, at 491,080 mt compared with 164,041 mt.
For the year, top met coal export destinations are Brazil, at 3.97 million mt, compared with 3.07 million mt in the year-ago period; India, at 3.69 million mt, compared with 1.53 million mt; and Japan, at 2.73 million mt, compared with 2.5 million mt.
Year-to-date met coal exports total 28.9 million mt, up 24.2% from the year-ago period. On an annualized basis, met coal exports for the full-year would total 57.7 million mt, the highest level since 2013.
Bituminous coal exportsBituminous coal exports in June totaled 3.58 million mt, up 17.9%
from May and up 94.6% from last year. Year-to-date, bituminous coal exports total 20.1 million mt, and would total 40.2 million mt on an annualized basis, the highest since 2012.
Top bituminous coal export destinations in June were India, at 980,225 mt, compared with 276,327 mt last year; Japan, at 338,673 mt, compared with 144,059 mt; and Mexico, at 277,865 mt, compared with 32,979 mt.
For the year, the top bituminous coal export destinations are India, at 5.37 million mt, compared with 2.26 million mt in the year-ago period; the Netherlands, at 2.1 million mt, compared with 2.89 million mt; and Egypt, at 1.78 million mt, compared with 214,198 mt.
Subbituminous coal exports totaled 612,148 mt in June, down 2.9% from last month and down 30.6% from the year-ago month. YTD subbit coal exports total 3.56 million mt, down 4.4% from the year-ago period, while exports on an annualized basis would total 7.1 million mt, the highest since 2013.
The top importer of US subbituminous coal in April was South Korea, at 467,263 mt, compared with 421,355 mt last year, followed by
Mexico, at 181,570 mt, compared with 226,179 mt last year.For the year, the top subbituminous coal exports destinations are
South Korea, at 2.26 million mt, compared with 1.65 million mt in the year-ago period; Mexico, at 1.03 million mt, compared with 1.15 million mt; and China, at 161,973 mt, compared with 156,359 mt.
— Andrew Moore
central appalachia quarterly coal production nears three-year high: msHa
Houston—Coal mines in Central Appalachia saw a near-three-year high in production volumes for the second quarter, as the metallurgical and export markets continue to remain strong, according to preliminary US Mine Safety and Health Administration data.
Despite the largest mine in Central Appalachia producing at a two-year low, mines in the region produced 20.37 million st of coal in Q2, up 1% from the 20.17 million st produced in Q1 and 0.9% from the 20.2 million st in the year-ago quarter.
It was the highest quarterly volume since 22.59 million st was produced in Q3 2015.
Combined with Q1, total CAPP coal production for the first half of 2018 is at 40.54 million st, up 4.6% from H2 2017 and 1.8% above the first half of 2017. The half-year total is the most since 41.3 million st was produced in H2 2017.
Despite the higher volumes in Q2, only 251 CAPP mines have reported production data to MSHA, compared with 281 mines in operation in the previous quarter and 258 mines in the year-ago quarter.
The Coronado Coal-owned Buchanan mine, located in Buchanan County, Virginia, produced 1.21 million st in Q2, down 11.7% from 1.37 million st produced in Q1 and 13.1% lower than the 1.39 million st in the year-ago quarter. It was the lowest quarterly volume for the low-vol metallurgical underground mine since 1.2 million st was produced in Q2 2016.
In the latest quarter, 12 mines produced coal for the first time since 2015, including one that was in operation for the first time since Q1 2004 and six that were operating for the first time ever.
The six mines produced 122,152 st of coal in Q2, led by the Gobco No. 14 surface mine, owned by Mountain Fuels Inc, and the underground Putney Darby Mine No. 1, owned by JRL Coal Inc, which
produced 49,577 st and 42,743 st, respectively.The top 15 mines in Central Appalachia all produced more than
300,000 st and combined to produce 6.64 million st in Q2, compared with only 13 mines that produced over 300,000 st in the previous quarter. The last time more than 15 mines produced 300,000 st or more was when 17 did so in Q1 2014.
Only three of the top 15 mines saw decreases from the previous quarter — the Buchanan mine was down 11.7%; Alliance’s Mine No. 4 was down 0.1%; and Arch’s Mountaineer II mine was down 23.3%. Five of the top 15 producing mines saw year-on-year decreases.
Natural Resources in the latest quarter for the largest coal producer in the region.
Blackhawk’s 28 mines produced 3.52 million st of coal in Q2, up 6.2% from 3.32 million st produced in the previous quarter and 5.4% above the 3.34 million st produced in the year-ago quarter. The company’s American Eagle mine output jumped to 487,458 st, up 24.2% from Q1, but down 13.2% from 561,657 st in the year-ago quarter.
Alpha produced 3.51 million st in Q2, up 5.8% from 3.32 million st in the prior quarter, but down 2.5% from 3.6 million st in the year-ago quarter. The Kingsport, Tennessee-based company’s largest mine, Republic Energy, produced 420,531 st in Q2, up 29.5% from 324,651 in Q1 and also up 1.9% from 412,764 st in the year-ago quarter.
surface production highest since Q3 2015Surface mine production in Central Appalachia was at 8.85 million st,
up 8.1% from 8.19 million st produced in the prior quarter and the highest quarterly volume for surface mines since 9.51 million st in the third quarter of 2015. Surface production represented 43.5% of the total CAPP production, up from 40.6% in the previous quarter and 40.5% in Q2 2017.
Arch Coal’s Coal-Mac mine was the largest surface mine with 662,053 st produced in Q2, up 8.6% from 609,482 st in the previous quarter and the most since 737,802 st in Q3 2014.
The remaining 11.52 million st was produced by underground mines, led by Buchanan, down 3.9% from 11.98 million st produced in Q1 and down 4.1% from 12 million st in the year-ago quarter.
Alpha was the largest surface producer in Q2 with its six mines producing 1.5 million st, up 15.4% from 1.31 million st in the previous
quarter but down 0.5% from a year ago.Blackhawk remained the largest underground miner with its 18
underground mines producing 2.35 million st of coal, up 4.6% from the previous quarter, but down 4% from 2.45 million st in the year-ago quarter.
— Tyler Godwin
aeP issues RFP for up to 23.2 million st for regulated plants
Louisville, Kentucky—American Electric Power is seeking as much as 23.2 million st of barge and rail coal through 2021 for the company’s regulated power plants, spokeswoman Tammy Ridout said Friday.
While large, the formal request for proposals is not an annual solicitation, she told S&P Global Platts in an email.
AEP is expected to burn around 33 million st in its regulated plants this year. It does not release consumption estimates for its unregulated facilities.
In all, the company is requesting bids to supply about 7.6 million st of Central Appalachia or Coloradan coal, 14 million st from the Powder River Basin and 1.6 million st from the Illinois Basin.
Deliveries would start later this year and conclude at the end of 2021.The coal specifications are 12,000 Btu/lb for CAPP barge coal;
12,000-12,500 Btu/lb for CAPP Rail (CSX) coal; 8,400-8,850 Btu/lb for PRB coal; and up to 11,500 Btu/lb for Illinois Basin barge coal.
The deadline to submit a proposal is 5 pm EDT August 14.Recently, AEP purchased an unspecified amount of CAPP spot coal
for its 2,600-MW Rockport station in Spencer County, Indiana, for a longer period of time than it had specified in a previous RFP.
Barge deliveries of about 12,000 Btu/lb coal began in July and are expected to run through the end of 2018.
— Bob Matyi
consol to seek permits for low-vol met mine in west Virginia
London—Consol Energy told analysts Thursday it will begin permitting a low-vol coking coal property at Itmann, West Virginia, where the company has 26 million st of reserves.
The permitting process will take at least 12-18 months, according to US investment bank Seaport Global. Higher demand for US coking coal in domestic and overseas markets has boosted interest in developing resources.
Consol previously operated the giant Buchanan low-vol HCC longwall mine in Virginia, before selling the mine along with coking coal resources to US miner Coronado Coal.
“Management was careful to say the project hasn’t been sanctioned yet. It also stated that it won’t be a high capital project,” Seaport said in a note late Thursday.
In the domestic met coal market, Consol announced it recently signed its first deal since 2013, for high-vol crossover met coal delivered in multiple shipments over the second half of 2018 to a US
coke operation.Consol said it sees potential for 300,000-500,000 st/year in
domestic met coal demand from 2019.Consol exports 2 million st/year of cross-over met coal, mainly to
Northeast Asia and Brazil with a little going to Europe, based on 2017 data. The met coal was sold by Consol at prices around 10% above Consol’s thermal coal, Seaport said.
US trader Xcoal Energy & Resources sells Consol’s Bailey coal to international steel companies.
Consol’s average coal revenue in Q2 was $47.34/st on 7.8 million st of sales, up from Q2 2017’s $44.75/st and 6.8 million st.
Seaport expects Consol to ship 27.6 million st in 2018, with 30% exports, and 8% of the total sold as met coal. Indian demand for Consol’s thermal coal has grown, it said.
— Hector Forster
warrior met coal expects longwall moves to hit H2 output
London—Warrior Met Coal expects to produce less coal in the second half of 2018, due to three planned longwall panel moves at its two premium HCC mines, after producing and selling 4 million st in the first half.
That may tighten supply for Warrior’s No.7 and No.4 coals, with spot activity in Q4 likely to focus more on the No.4 mid-vol brand as Atlantic contract customers are heard maximizing nominations of premium coal due to high global steel prices and demand.
Warrior expects full year coal sales and production of 7.1 million-7.5 million st, and cash cost of sales at $89-$95/st FOB Mobile port, it said in an earnings update this week. Warrior’s upgraded previous 6.8 million-7.3 million st guidance, after increasing productivity in Q2 despite a week of maintenance.
Warrior said it plans two longwall moves in Q3 and one in Q4.In Q2, Warrior sold coal at an average of $167.04/st FOB Mobile, or
$184.13/mt.Warrior has since February 2017 had a sales and trading
arrangement with Xcoal Energy & Resources, and Xcoal accounting for $42.2 million, or 13% of total revenues in Q2 2018, compared with $74.7 million, or 21% of total revenues in Q2 2017, Warrior said.
During the six months ended June 30, Xcoal accounted for around
eXPORt maRKets
ciF aRa physical price slides depsite flurry of late trades
�■ Five ciF aRa spot trades�■ FOB colombia price falls�■ Rhine water levels hit 75cm
London—The CIF ARA 6,000 kcal/kg NAR 15-60 day spot price fell 20 cents Friday to be assessed at $94.05/mt, the lowest level since late-May, as the bearish global trend continued through the end of the week.
Sources said the low seasonal liquidity coupled with the recent heat wave across Europe had made it “easy to drive the market” and many participants were cautious as a result, taking a further step back from spot activity.
A European broker said sentiment from Asian markets was also a key driver, considering the more bearish indicators from China.
Despite water levels on the Rhine river reaching as low as 75cm during the week, no supply tightness was heard as power plants would either run down their existing stockpiles, or divert barge transportation where possible.
A flurry of spot trades were seen in the afternoon session. Three multi-origin CIF ARA, 50,000 mt, 6,000 kcal/kg NAR cargoes traded, all for October loading, at $94/mt and then at $93.25/mt twice.
A European utility-trader said these spot trades were more representative of certain counterparties positions rather than fundamental demand as the summer season was still keeping most spot activity minimal.
In other markets, Platts weekly FOB Colombia 6,000 kcal/kg NAR price was assessed at $89/mt, down $3.50 on the week, as the bearish movements in European and Asian delivered-markets weighed on other
sNaPsHOtcrunch time for german coal phase-out decisionContrary to Donald Trump’s tweets, Germany has not got rid of its coal plants just yet, not least because the government in Berlin is yet to come up with a clear line on the issue. In this video, we look at the latest developments with a government-appointed commission expected to draw up a plan before year-end.
watch video athttp://plts.co/1qVu30l2Hid
$144.9 million, or 19% of total revenues, Warrior said.Xcoal takes title to and markets Warrior’s coal with an offtake
arrangement of the greater of either 10% of total production during the applicable term of the arrangement, or 250,000 mt.
pockets of demand, such as South America and the MENA region.Platts FOB Russia Baltic price similarly fell to $89.75/mt, down
$4.35 on the week. A European trader said Russian producers were preferring to sell directly to European utilities rather than on screen to get greater premiums.
Little trade activity was heard for South African coal Friday. Coal stockpiles at Richards Bay Coal Terminal were heard at 3.9 million mt, up by 400,000 mt on the week, and Platts FOB Richards Bay 5,500 kcal/kg NAR price was assessed at $83.90/mt, down 30 cents on the day.
Stronger German power prices provided support to European coal futures, although the day’s trading was markedly illiquid.
The Cal-19 contract was assessed at $85.15/mt, up a marginal 5 cents on the day after falling in the late afternoon.
— Joseph Clarke
us thermal coal export prices soften as aRa prices dip, though indian demand remains strong
Houston, London—US thermal coal export prices softened this week as delivered coal into Northern Europe dipped even as Indian demand remains strong.
A European utility buyer said he was hearing nothing from the US recently, but expects increasing offers as CIF ARA prices drop further.
“When the prices were high, [sellers] were telling everyone, ‘there was no coal,’” the trader said. “Now, prices are coming off and the guys are saying, ‘yeah, we do have availability.’”
A large trading house was heard to have a floor price for FOB New Orleans coal at a $26-$28/mt discount to the CIF ARA level.
A European trader said this was because other suppliers had less spot availability, and most tons had already been contracted out.
This would give an average FOB New Orleans price of around $68/mt, “but [the trading house] would not give this I believe, they would quote higher,” the trader said.
S&P Global Platts currently is assessing the sulfur discount for Illinois Basin coal FOB New Orleans at roughly $13/mt. The FOB price was assessed Friday at $68/mt, basis 6,000 kcal/kg NAR.
A European trader said there were some slight loading issues out of East Coast ports, meaning spot cargoes for late-August would be unlikely unless the ship was already on the water.
A prominent trader of Central Appalachian coal was heard offering at lower prices throughout the week. A European trader questioned this strategy as there were still a few small pockets of demand in the Mediterranean region, although demand for CIF ARA cargoes was much lower.
“I am not seeing a lot of CAPP (offered),” a European trader said. The source said the sellers of CAPP coal could perhaps be positioning themselves for later on in the year as prices were expected to rise.
The declining CIF ARA price in the week to Friday was placing negative pressure on FOB Hampton Roads prices.
“The market is dropping,” a broker said. The source added that buyers were using the relatively low demand from Europe for low sulfur US coal as an opportunity to pressure sellers for larger price discounts.
The broker said he was trying to sell NAPP coal at $85/mt, but got resistance from buyers. A sell-side source was heard booking deals for North Appalachian coal around $1115/mt CFR East Coast India. This would equate to a FOB level of $84-$85/mt, according to the source.
“We still have good interest from end users in India,” the source said.The source was expecting to sell around one Capesize vessel of
NAPP to India each month.“India is the key demand center for NAPP coal,” the source added.
Our experienced editors will provide answers to these questions and more:
- Why are pricing benchmarks so important?
- How do I manage risk and monitor the performance of oil?
- What’s the importance of the Market-on-Close (MOC) principle in Platts’ oil price discovery process?
- How do I understand and follow price developments across the oil supply chain?
- What are the key pricing trends for the physical and derivatives oil market?
Join our experienced editors to hear all about
Platts Price Assessment Methodology Training May 8 | 12:30 pm – 2pm EDT S&P Global New York Office
Award Presenting & Reception Sponsor
Award Presenting Sponsor
December 6, 2018 | Cipriani Wall Street | New York City, NY
Exceptional achievements deserve global recognition.
Since 1999, the S&P Global Platts Global Energy Awards honors organizations and individuals who are dedicated to achieving excellence in the energy industry.
Nominate your company by September 7th 2018.
For category details and rules, visit globalenergyawards.com
