US coal carloads dip for the week but trend is higher: AAR data

US coal carloads totaled 64,641 in the week ended May 22, down 5.4% from the prior week but up 38.2% from the year-ago week, data from the Association of American Railroads showed May 26.

The year-ago week totaled 68,237 carloads, which was the highest amount reported so far this year, and the highest amount since the week ended February 1, 2020.

Coal deliveries are largely expected to rise this year as the economy strengthens, which is also pulling up natural gas prices, making coal more competitive.

In addition, the Washington-based association said that for some rail traffic categories, percentage changes for the current week compared with the same week in 2020 are inflated because of the widespread shutdowns — and subsequent large reduction in rail volumes — that impacted many economic sectors last year at this time.

On a year-to-date basis, coal carloads are now up 5.8% compared with the same period a year ago, after starting the year with negative comparisons.

Coal carloads are likely to increase throughout the year due to higher natural gas prices, which will make coal more competitive against natural gas. In its most recent Short-Term Energy Outlook, the US Energy Information Administration forecast Henry Hub natural gas prices to average $3/17/MMBtu this year.

In 2020, the Henry Hub price averaged $2.13/MMBtu; through May 25, the price is averaging $2.75/MMBtu.

The Eastern US railroads, CSX and Norfolk Southern, both continue to show strong increases in volumes on a year-to-date basis, likely due to the increase in metallurgical coal pricing. The S&P Global Platts assessment for FOB US East Coast High Vol A met coal was $175/mt, up from $140/mt at the start of the year.

CSX reported 12,264 carloads for the week ended May 22, down 9.4% from the prior week but up 52% from the year-ago week. On a year-to-date basis, CSX coal carloads are up 4.9%.

NS reported 13,774 carloads for the week ended May 22, down 2.7% from the prior week but up 120% from last year. Year-to-date volumes are up 15% compared with last year.

Union Pacific, which primarily operates in the Western US, reported 13,316 carloads, down 6% from the prior week but up 1.4% from the year-ago week. Coal volumes on a year-to-date basis are down 9.5%.

BSNF Railway reported 29,706 carloads, down 4.4% from the prior week, but up 35.5% from the year-ago week. Its annual volumes are up 3% on a year-to-date basis.