Coal Production Tumbles Week-after-Week
Weekly coal production
According to the latest EIA (U.S. Energy Information Administration) weekly coal shipment report, US coal production was 14.7 million short tons for the week ended September 23, 2017. The EIA report is based on railcar loadings. The latest production estimate has fallen approximately 5.3% from the previous week’s production estimate of 15.7 million short tons. It has also fallen 4.7% from the corresponding week in 2016.
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Of the total estimated coal shipments, nearly 3.6 million short tons were estimated to come from the Appalachian region, while approximately 2.7 million short tons were expected to come from the Interior region. The Western region is estimated to be the source for the remaining ~8.3 million short tons.
Is coal shipment a significant parameter?
Factors such as the demand for coal, the accessibility of railcars, and competition from more economical fuels have an impact on coal shipments. Coal mines are exploited, depending on the demand for coal. Therefore, in the long term, coal shipments reflect production.
A steady rise or fall in coal shipments week-over-week compared to the corresponding period in the previou year is a significant indicator for coal (KOL) mining companies (KOL) such as Alpha Natural Resources (ANRZQ), Peabody Energy (BTU), Arch Coal (ARCH), and Cloud Peak Energy (CLD).
In the short term, factors such as railcar unavailability, adverse weather conditions, and supply hiccups can result in irregularities in shipments. Consequently, it can be misleading to consider weekly coal shipment data.
In the next part of this series, we’ll look at recent coal prices.