Coal news and updates

Illinois Basin coal market stressed by low demand, prices

The Illinois Basin market continues to wilt as low spot demand and ongoing production leaves more tons on the ground and anxious producers with more to sell, market sources said Friday.

"We're at the point where it's no longer rhetoric to say we're going to leave coal in the ground rather than sell at these prices," one producer said.

While there have been some indications of production discipline -- notably Murray Energy's recent announcement that it would lay off some Illinois Basin employees as well as rumored production cutbacks at some other basin mines -- the market is still dealing with oversupply.

"We haven't been in the market for some time," one utility source said, adding that low power and gas prices are keeping them out of the IB market. "We're long this year, building our stockpiles."

The producer said that "2016 is where my focus is, and there are numbers all over the board on that."

Based on feedback from market sources, Platts assessed Illinois Basin 11,800 Btu/lb, 5 lb SO2/MMBtu FOB rail coal at $36.75/st, unchanged from last week, and 11,500 Btu/lb, 5 lb SO2/MMBtu FOB barge coal at $40.25/st.

Illinois Basin 11,500 Btu/lb, 5 lb SO2/MMBtu FOB Lower Ohio River, with a maximum chlorine content of 0.35% -- the spec underlying the CME Group's physically settled IB contract -- was assessed Friday at $31.40/st, also unchanged from last week, based on broker marks.

A deal for a similar-spec coal from a southern Illinois producer was reported at $34/st FOB barge, but Platts was unable to confirm it.

source: http://www.platts.com