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Tracking Rail Traffic for the Week Ended February 18

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Part 4
Tracking Rail Traffic for the Week Ended February 18 PART 4 OF 15

Why Did CSX’s Carloads Rise?

CSX’s carloads

In the week ended February 18, 2017, CSX’s (CSX) overall railcar volumes rose 6.6% YoY (year-over-year). In the seventh week of 2017, CSX hauled ~72,000 railcars, compared with 67,000 plus railcars in the same week last year.

CSX’s carloads, excluding coal and coke, rose 3.7%. If you want to compare this week’s freight volume data with the previous week’s, check out Market Realist’s A Light at the End of Tunnel: Rail Traffic, Week Ended February 11.

Why Did CSX&#8217;s Carloads Rise?

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CSX’s coal carloads

On Norfolk Southern’s (NSC) lines, CSX’s coal plus coke railcar volumes rose 17.2% in the week ended February 18, 2017. However, NSC’s percentage rise in the same category was far lower than CSX’s. Coal made up 16.5% of CSX’s volumes in 2016, compared with 19.5% one year ago.

According to the EIA (U.S. Energy Information Administration), in 2016, coal production fell 18%, or by 158 MMst (million short tons), to 739 MMst, which represents its lowest level of coal produced since 1978. In 2017, growth in coal-fired electricity generation is expected to lead to a 7% rise, or an additional 51 MMst, in total US coal production. The majority of the rise is anticipated to come from the western and interior United States.

Eastern railroads have cited the shift from coal to natural gas (UNG) in electricity generation plants as one of the main reasons for the fall in utility coal transportation. The coal tsunami has affected major US coal producers such as Alliance Resource Partners (ARLP), Consol Energy (CNX), and bankruptcy-declared Peabody Energy (BTU). However, the recent trends in coal prices, backed by increased coal transportation, could suggest a revival.

Bull and bear commodity groups

The commodity groups that posted significant rises in the week ended February 18, 2017, were as follows:

  • crushed stone, sand, and gravel
  • waste and nonferrous scrap
  • lumber and wood products
  • primary metal products

The laggard commodity groups were as follows:

  • petroleum products
  • metallic ores
  • motor vehicles and parts
  • grain

Investors interested in comparing this week’s freight volume data with the previous week’s can check out A Light at the End of Tunnel: Rail Traffic, Week Ended February 11. We’ll look at CSX’s intermodal traffic in the next part.

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