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Powder River Basin and Central Appalachia Coal Prices Rise

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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.

Peabody Energy (BTU), Arch Coal (ACI), and Cloud Peak Energy (CLD) are major coal producers (KOL) that operate in the region.

PRB coal spot prices averaged $10.6 per ton for the week ending March 7— the highest in six weeks. The increase in prices comes as some consolation after what you could call a dismal winter for coal producers.

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Illinois Basin

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 Appalachia region. Most power plants installed scrubbers to soak sulfur, which causes acid rain. Peabody Energy and Alliance Resource Partners (ARLP) are major players that operate in the region.

ILB coal prices came in at $40.30 for the second straight week.

Appalachia

Appalachia is located in the eastern US. It’s the oldest coal-producing region in the United States. The Appalachian coal region is affected 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 $53.00 per ton for the week ending March 6. This was marginally up from $52.40 per ton the previous week. Northern Appalachian coal prices remained stable at $61.20 a ton.

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