Coal news and updates

Powder River Basin Coal Still under Pressure Even as Others Gain

Powder River Basin coal

PRB (Powder River Basin) spot coal prices averaged $9.95 per ton for the week ended July 10. That’s $0.02 below the price for the week ended July 3. PRB coal has averaged below $10 a ton for the third straight week now. Prices have remained under pressure since the start of the year due to low natural gas prices.

The Powder River Basin is the largest coal-producing region in the United States. It’s located in Wyoming and Montana. PRB produces almost half of the total US coal output. It’s also 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. Weak prices for PRB coal don’t bode well for these producers.

Illinois Basin

The ILB (Illinois Basin) is located in Illinois, Ohio, and Western Kentucky. The basin produces high-sulfur coal. In recent years, ILB coal became competitive with coal from the neighboring Appalachian region, as power plants installed scrubbers to soak sulfur, which causes acid rain. Peabody Energy and Alliance Resource Partners (ARLP) are major players that operate in the region.

ILB coal prices increased to $40.85 per ton during the week ended July 10 after remaining steady at $40.45 per ton for nine consecutive weeks.
Appalachia

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

Central Appalachian thermal coal prices increased $0.21 to $41.03 per ton. North Appalachian coal prices increased $1.15 to $58.05 per ton.

source: http://marketrealist.com