The EIA’s coal production estimates
Every week, the EIA (US Energy Information Administration) publishes shipment figures based on coal railcar loadings. Coal is an important commodity for railroad companies—like Union Pacific (UNP) and CSX (CSX). However, coal’s importance is decreasing due to the emergence of shale oil. It’s also decreasing because of competition from other commodities.
Coal producers mine coal on demand. As a result, the EIA’s shipment estimates mirror production. Shipments are a function of demand and other factors—like rail underperformance and competition from other commodities. The report is published with a one-week lag. The current report is for the week ended March 13.
Coal shipments on the rise
According to EIA estimates, during the week ended March 13, US coal shipments increased to 18.5 million tons—compared to 17.5 million tons during the week ended March 6. Out of the total shipments, 7.7 million tons were recorded in the east, while the remaining 10.8 million tons were recorded in the west.
Impact on producers
Weekly coal shipment data can be misleading. It can be distorted by factors like the unavailability of railcars, bad weather, and supply issues—apart from genuine demand-side issues. A sustained increase or decrease in coal shipments over a few weeks—compared to the previous year—is a positive or negative indicator for coal producers (KOL) like Peabody Energy (BTU), Alliance Resource Partners (ARLP), Arch Coal (ACI), and Cloud Peak Energy (CLD).