Powder River Basin
The Powder River Basin, or PRB, is located in Wyoming and Montana. It’s the largest coal producing region in the US. It produces almost half of the total US coal output. The PRB is also the lowest cost thermal coal producing region in the world.
PRB coal spot prices averaged $10 per ton for the week ending February 6—down from $10.50 per ton the previous week. While PRB coal is more competitive against natural gas due to its low cost, ultra-low natural gas prices put coal under pressure in recent weeks.
The Illinois Basin, or ILB, is located in Illinois, Ohio, and western Kentucky. The region produces high sulfur coal. In recent years, ILB coal became competitive against coal from the neighboring Appalachian region. Most power plants installed scrubbers to soak sulfur. Sulfur causes acid rain. Peabody Energy and Alliance Resource Partners (ARLP) are major players that operate in the region.
ILB coal prices remained stable at $45.30 during the week ending February 6.
The Appalachian region is located in the eastern US. It’s the oldest coal producing region in the US. The Appalachian region is affected the most by natural gas price movements. However, as production in the region is already cut down, prices showed a reduced correlation with natural gas prices.
Central Appalachian thermal coal prices came in at $50.90 per ton for the week ending February 6. This was up from $46.30 per ton the previous week. Coal prices increased—despite the continued fall in natural gas prices.
For the latest updates, visit Market Realist’s Coal page.