Powder River Basin
PRB (Powder River Basin) coal spot prices averaged $9.90 per ton for the week ending May 8, unchanged from the previous week. PRB coal prices have remained under pressure since the start of the year due to low natural gas prices. Even an increase in natural gas futures prices during the previous week didn’t help ease the pressure on PRB coal prices.
The 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.
The ILB (Illinois Basin) is located in Illinois, Ohio, and Western Kentucky. The region produces high sulfur coal. In recent years, ILB coal became competitive with coal from the neighboring Appalachian region. Most power plants installed scrubbers to soak sulfur because it causes acid rain. Peabody Energy and Alliance Resource Partners (ARLP) are major players that operate in the region.
ILB coal prices dropped marginally to $40.5 a ton during the week ending May 8, down 30 cents from the previous week.
The Appalachian region
The Appalachian region is located in the eastern part of US. It’s the oldest coal-producing region in the US. It’s affected the most by natural gas price movements. However, as prices of Appalachian coal are already down to marginal cost, they show a reduced correlation with natural gas prices.
Central Appalachian thermal coal prices fell for the third straight week. Central Appalachian thermal coal prices came in at $47 per ton during the week ending May 8, down 10 cents from the previous week. North Appalachian coal prices remained stable at $60.90 per ton for the third straight week.