ILB (Illinois Basin) coal prices fell to $34.35 per ton during the week ended July 17 after hovering around $40–$41 per ton for 20 consecutive weeks. The week saw prices fall by more than $6 a ton.
The ILB is located in Illinois, Ohio, and Western Kentucky. The basin produces high-sulfur coal. In recent years, ILB coal became competitive with coal from the neighboring Appalachian region, as power plants installed scrubbers to soak sulfur, which causes acid rain. Peabody Energy (BTU) and Alliance Resource Partners (ARLP) are major players that operate in the region.
Powder River Basin coal
PRB (Powder River Basin) spot coal prices averaged $9.88 per ton for the week ended July 17. That’s $0.07 below the price for the week ended July 10. PRB coal has averaged below $10 a ton for four straight weeks now. Prices have remained under pressure since the start of the year due to low natural gas prices.
The Powder River Basin is the largest coal-producing region in the United States. It’s located in Wyoming and Montana. It produces almost half of the total US coal output. It’s also the lowest-cost thermal coal-producing region in the world.
The Appalachian region is located in the Eastern United States and is the oldest coal-producing region in the country. This region is affected the most by natural gas price movements. However, because Appalachian coal prices are already down to marginal costs, they now show a reduced correlation with natural gas prices.
Central Appalachian thermal coal prices increased $2.10 to $43.13 per ton during the week ended July 17. However, north Appalachian coal prices dropped $4.85 to $53.20.