trending Market Intelligence /marketintelligence/en/news-insights/trending/dz8R5nG1JXqO-Nlc3hPIHA2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

OTC market: US thermal coal prices post lackluster gains as books close on another quarter

Essential Energy Insights - September, 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August

Bull market leaves US utilities behind in August

Utilities, midstream reckon with energy transformation on the horizon

OTC market: US thermal coal prices post lackluster gains as books close on another quarter

Coal prices posted lackluster gains the week ended July 7, withrising prices along the front part of the curve more reflective of thedifferential in prices between third-quarter and fourth-quarter delivery.

As the prompt quarter rolled forward, prices for 12,500 Btu/lb,less-than-1% sulfur for delivery during the nearby quarter shot 11.2% higher to$41.85/ton, but are only reflective of a 4% increase in the price for deliveryduring the fourth quarter of 2016. The 3.5% increase in the prompt-quarterprice for 8,800 Btu/lb Powder River Basin coal reflects a 0.1% increase fordelivery during the fourth quarter.

SNL Image

While producers have become more in coal this year, a combination offactors continues to weigh on the domestic thermal markets, including lownatural gas prices and elevated coal stockpiles. Weakness in international coalmarkets has added to domestic producers' woes as U.S. coal that would otherwisebe shipped overseas is absorbed into the nation's supply. As the U.S. dollarhas strengthened relative to the currency of other coal-producing nations, ithas cushioned the impact of falling international coal prices on producers thatoperate outside the U.S.

Lately, however, the natural gas market has shown strength asnatural gas storage inventories have been climbing at a lower-than-average rate. Through July 7, prompt-month natural gas futuresare up 19.0% year-to-date and up 1.9% year over year to $2.777/MMBtu.

Even so, the market must contend with elevated coal stockpiles.Through the end of April, power-sector coal stockpiles were 19.0% above the10-year average at 196.2 million tons, according to the U.S. Energy InformationAdministration, which estimated days of burn at 24.7% above and 34.4% above thefive-year average for bituminous and subbituminous coal, respectively.

Meanwhile, the international coal market is not in much bettershape as prompt-month API2 swap futures are up 19.7% year-to-date but down 2.4%year over year at $57.15/tonne.

SNL Image

SNL Image

The EIA has cited weak global fundamentals and low internationalcoal prices as limiting U.S. coal exports, as "lower mining costs, cheapertransportation costs and favorable exchange rates continue to provide anadvantage to mines in other major coal-exporting countries." In itslatest outlook, thegovernment agency raised its outlook for U.S. coal exports 12.1% to 66.2million tons, but that figure is down 10.5% versus 2015, and the governmentexpects 2017 exports to slide another 12.3% to 58.1 million tons.

As of July 7, the Australian dollar is 3.0% stronger year-to-dateand 0.9% stronger year over year relative to the U.S. dollar, while theColombian peso is 12.1% weaker relative to the U.S. dollar year over year,according to SNL Energy data.

SNL Image

Amid a weak U.S. coal export outlook, the EIA expects thatcoal-fired generation will fall behind gas-fired generation as the nation's topprovider of electricity for the first time annually in 2016. The U.S.government trimmed its short-term outlook for power-sector coal demand to 667million tons in 2016, down 2.1% versus the prior outlook.

Longer-term projections have U.S. coal consumption and productionsliding furtherwhether or not carbon emissions limits are enacted.

Coal producers are struggling to balance running their operationsefficiently against maintaining market share, and higher-cost production hasfallen off. The government expects the largest coal production decline, on botha percentage and tonnage basis, since record keeping began in 1949, with thelargest percentage declines coming out of the western U.S. and Appalachia.

EIA coal production estimates show that all coal-producing regionsare being hit by the weak market. During the week ended July 2, domestic coalproduction totaled 14.1 million tons, down 1.3% versus the year-ago week, withthe Appalachian region seeing a 4.0% decline. Year-to-date through July 2,total domestic coal production is down 27.7% to 330.5 million tons.

Analysts are looking for a cyclical recovery for coal productionin 2017, as disciplined production and rising natural gas prices are alreadyshowing signs ofbringing coal stockpiles lower.

SNL Image

SNL Energy is an offering of S&P Global Market Intelligence.Market prices and included industry data are current as of the time ofpublication and are subject to change. For more detailed market data, includingpower,naturalgas and coalindex prices, as well as forwardsand futures,visit our Commodities Pages. For weekly U.S. coal production data, visit our regional coalproduction data page. For foreign currency exchange rates, visit our currency exchangerates data page.