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What Impacted the US Coal Market in the Week Ended October 6?

PART:
1 2 3 4 5
Part 4
What Impacted the US Coal Market in the Week Ended October 6? PART 4 OF 5

Coal Production Rebounded in the Last Week of September

Weekly coal production

For the week ended September 30, 2017, US coal production totaled 15.3 million short tons. The EIA (Energy Information Administration) publishes the latest coal shipment report every week based on railcar loadings. 

The latest production estimate rose ~4.4% from the previous week’s production estimate of 14.7 million short tons. The reading rose 2.7% from the corresponding week in 2016.

Coal Production Rebounded in the Last Week of September

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Of the total estimated coal shipments, ~3.7 million short tons and ~2.9 million short tons were estimated to be sourced from the Appalachian and Interior regions, respectively. The remaining ~8.7 million short tons is estimated to be sourced from the Western region.

Coal shipments

Demand for coal, railcar availability, and competition from more economical fuels are some of the factors that affect coal shipments. The amount of coal mined from coal reserves depends on the demand for coal. So, we can say coal shipments mirror production in the long term.

Hence, a sustained drop or rise in coal shipments week-over-week compared to the equivalent timeframe during the previous year could be considered a key indicator for major coal (KOL) producers. These coal producers include Cloud Peak Energy (CLD), Alliance Natural Resources (ARLP), Alpha Natural Resources (ANRZQ), and Natural Resource Partners (NRP).

However, considering only weekly coal shipment data might be misleading. In the short term, factors such as rail transportation unavailability, unfavorable weather conditions, and supply interruptions may lead to sporadic shifts in shipments.

Continue to the final part of this series to review the region-wise coal prices.

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