CSX: Commodities That Led to the Fall in Carloads in Week 15
CSX’s freight volumes
In the week ended April 15, 2017, CSX’s (CSX) overall railcar volumes fell ~2.5% YoY (year-over-year). That week, its freight volumes were ~70,000 compared to ~71,500 railcars in the corresponding week last year. Its carloads, excluding coal and coke, fell 3.6% in the same week. Its rival Norfolk Southern’s (NSC) carload business was flat during the same period.
If you want to compare this week’s freight volume data with the previous week’s data, check out Market Realist’s Week 14: US Freight Rail Volumes on a Growth Trajectory.
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CSX’s coal and coke railcar volumes rose just 1.6% in the week ended April 15, 2017. However, NSC posted a remarkable rise of 30.0% in the same category. Coal made up 16.5% of CSX’s volumes in 2016 compared to 19.5% a year ago.
Why is coal vital for CSX?
According to the EIA (U.S. Energy Information Administration), in 2016, coal production fell 18.0%, or 158.0 MMst (million short tons) to 739.0 MMst. That figure represents the lowest level of coal produced since 1978.
In 2017, growth in coal-fired electricity generation is expected to lead to a 7.0% rise in total US coal production, or an additional 51.0 MMst. The majority of the rise will likely come from the Western and interior regions of the United States.
Eastern railroads have cited electricity generation plants’ overall shift from coal to natural gas (UNG) as one of the main reasons for the fall in utility coal transportation. The shift has affected all major US coal producers, including Alliance Resource Partners (ARLP), Consol Energy (CNX), and the bankrupt Peabody Energy (BTU). However, recent coal price trends 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 April 15, 2017, were the following:
- primary forest products
- food products
- lumber and wood products
- nonmetallic minerals
- iron and steel scrap
The commodity groups with major falls were the following:
- metallic ores
- pulp and paper products
- primary metal products
- stone, clay, and glass products
Next, let’s take a look at CSX’s intermodal volumes in the 15th week of 2017.