Coal news and updates

PRB Coal Prices Fall Hard, Others Remain Steady

Powder River Basin coal

For the week ended October 30, 2015, PRB (Powder River Basin) spot coal prices came in at $10.30 per ton, down from $11.05 per ton at the end of the previous week. The Powder River Basin, located in Wyoming and Montana, is the largest coal-producing region in the United States. It accounts for almost half of the total US coal output. It’s the lowest cost thermal coal-producing region in the world.

Peabody Energy (BTU), Arch Coal (ACI), and Cloud Peak Energy (CLD) are major coal producers (KOL) that operate in this region.

Illinois Basin

The ILB (Illinois Basin) remained at $32.75 per ton during the week ended October 30. The Illinois Basin, located in Illinois, Ohio, and Western Kentucky, produces high-sulfur coal. ILB coal became competitive with coal from the neighboring Appalachian region. Power plants installed scrubbers to soak up sulfur, which contributes to acid rain.

Peabody Energy, Natural Resources Partners (NRP), and Alliance Resource Partners (ARLP) are major players that operate in the region. Utilities (XLU) such as Southern Company (SO) and Tennessee Valley Authority use ILB coal.
The Appalachian region

Central Appalachian coal prices dropped marginally to $41.88 per ton, while North Appalachian coal prices remained at $52 during the week ended October 30.

The Appalachian region, located in the Eastern United States, is the oldest coal-producing region in the country. Of all the coal-producing regions, the Appalachian region is affected most by natural gas price movements. However, because Appalachian coal prices are already down to marginal costs, they show a reduced correlation with natural gas prices.

source: http://marketrealist.com