Powder River Basin spot coal prices
For the week ending October 7, 2016, PRB (Powder River Basin) spot coal prices remained nearly unchanged at $11.9 per ton. The Powder River Basin, which is located in Wyoming and Montana, is the largest coal-producing region in the United States. It accounts for almost half of the total coal output in the United States. It’s also the lowest cost thermal-coal-producing region in the world.
Illinois Basin coal prices
ILB (Illinois Basin) coal prices rose nearly 4% on a week-over-week basis to $33.25 per ton. However, the current prices are still at a multiyear low. The ILB, located in Illinois, Ohio, and Western Kentucky, produces high sulfur coal. Notably, ILB coal became competitive with coal from the neighboring Appalachian region. Power plants installed scrubbers to soak up sulfur, which contributes to acid rain.
Peabody Energy, Natural Resources Partners (NRP), and Alliance Resource Partners (ARLP) are major players that operate in the region. Utilities (XLU) such as Southern Company (SO) and Tennessee Valley Authority use ILB coal.
Coal prices in the Appalachian region
During the week ending October 7, 2016, Central Appalachian coal prices remained unchanged at $40.00 per ton when compared to the previous week. However, the North Appalachian coal prices fell nearly 2% on a week-over-week basis to $40.75 per ton.
The Appalachian region, which is located in the Eastern United States, is the oldest coal-producing region in the country. Of all the coal-producing regions, the Appalachian region is affected most by natural gas price movements. However, because Appalachian coal prices are already down to marginal costs, they show a reduced correlation with natural gas prices.