ACIIQ

Vale SA’s (VALE) coal production for 3Q16 rose 54.0% QoQ to reach 2.3 million tons, mainly due to the ramp-up of the Moatize II plant after its startup in August 2016.

Bituminous coal inventories with power plants in the United States fell to 60.3 million tons, or 87 days of burn, at the end of July 2016. This compares to 66.6 million tons, or 86 days of burn, at the end of June 2016.

For the week ended September 23, the EIA reported that natural gas inventory came in at 3,600 billion cubic feet compared to 3,551 Bcf one week earlier.

Low natural gas prices over the past few months have hurt coal producers (KOL)—especially those with operations in the East and Midwest parts of the US.

According to EIA estimates, US coal shipments fell to 15.1 million short tons during the week ended September 10, 2016.

Although coal and crude oil don’t directly compete with each other as fuels, coal investors should still track crude oil prices.

For the week ending September 2, natural gas inventory came in at 3,437 Bcf (billion cubic feet), as compared to 3,401 Bcf one week earlier.

According to the EIA, the capacity factor for coal-fired power plants came in at 60.6% in June 2016 compared to 41.1% in May 2016.

The EIA’s current report for May 2016, published on August 26, specified that the electricity output in the United States came in at 317.7 million megawatt-hours in May.

Cloud Peak Energy reported positive growth in its 2Q16 EBITDA margins. Cloud Peak Energy’s EBITDA margins came in at 11.1% in 2Q16.

Of all the major coal mining companies, Alliance Resource Partners’ cost of sales per ton fell the most in 2Q16. It reported a 14% decline on a YoY basis.

Westmoreland Coal witnessed the highest growth in coal pricing compared to its peers in 2Q16. Most coal mining companies witnessed a drop in revenues.

The recovery in commodity prices helped coal stocks recover from their 1Q16 lows. High natural gas prices can have an indirect positive impact on coal stocks.

For 2Q16, Westmoreland’s interest expenses came in at $29.2 million, as compared to $22.7 million in 2Q15 and $27.9 million in 1Q16.

Cloud Peak Energy (CLD) announced its 2Q16 earnings results after market hours on July 28, 2016. It posted strong operational performance for 2Q16.

Alliance Resource Partners (ARLP) announced its 2Q16 earnings results for the quarter ended June 30, 2016, before market hours on July 26, 2016.

Analysts expect Peabody Energy to report $55 million as EBITDA for 2Q16 and 5.1% as EBITDA margin. Lower EBITDA implies lower income from the company’s ongoing operations.

Peabody Energy (BTUUQ) reported about $1.3 billion as consolidated revenue for 2Q15. Analysts estimate that Peabody Energy will report about $1.1 billion in 2Q16.

According to its latest 10-Q filings, Westmoreland Coal (WLB) has about $1.13 billion of debt on its books as of March 31, 2016.

Analysts expect Westmoreland Coal to report EBITDA of $62.1 million and an EBITDA margin of 17.6%. This implies higher income from its ongoing operations.

Westmoreland Coal reported about $349 million in consolidated revenues for 2Q15. Analysts estimate that it will report $353 million in 2Q16 revenues.

Of the major coal (KOL) mining companies, Westmoreland Coal (WLB) is the only company to witness a rise in adjusted net income on a YoY (year-over-year) basis.

According to Westmoreland Coal’s (WLB) company filings, the acquisition of San Juan Coal in January 2016 helped WLB to report higher adjusted EBITDA in 1Q16.

The majority of coal mining companies witnessed negative coal pricing growth on a YoY basis. However, Arch Coal (ACIIQ) saw a marginal increase in average coal sales price per ton sold on a YoY basis.

Uncertainty surrounding the recovery of coal prices and the enactment of environmental regulations such as the Clean Power Plan impacted coal stocks in 1Q16.

Alliance Resource Partners (ARLP) reported a strong operational performance during 1Q16.

As of February 29, 2016, Peabody Energy (BTUUQ) has about $940 million in liquid assets.

Coal mining companies such as Peabody Energy (BTUUQ) primarily cater to power utilities and steelmakers.

According to Peabody’s news release on its Chapter 11 filing, the bankruptcy court approved all of the first-day motions related to its Chapter 11 restructuring on April 14, 2016.

During the restructuring process, Peabody Energy hopes to continue its normal course of business with cash generated from ongoing operations, existing liquidity, and new financing.

Peabody Energy (BTUUQ) expanded its presence both in the US and internationally through strategic acquisitions.

Peabody Energy filed for Chapter 11 bankruptcy protection on April 13, 2016. The company’s bankruptcy was widely anticipated.

Westmoreland Coal (WLB) reported an ~11% increase in average cost of coal sold per ton compared to fiscal 2014. The average cost per ton of coal sold came in at $21.50 compared to $19.30 during fiscal 2014.

According to Peabody Energy’s filings, the proceeds from the transaction with Bowie Resource Partners are crucial for it to meet future financial covenants.

On February 29, Peabody Energy announced in a press release that it wouldn’t be able to file its 10K on time. It has about $6.3 billion in debt on its books.

Cloud Peak Energy reported a marginal increase in cash margins at $2.98 per ton sold in 2015 compared to $2.82 per ton sold in 2014.

Peabody Energy’s adjusted EBITDA for 4Q15 came in at $53 million—compared to analysts’ estimates of $116 million. The value fell by nearly 75% on a YoY basis.

According to EIA projections, the Clean Power Plan will not have a significant impact on the quantity of coal produced or coal prices in the short term, until implementation of the plan.

On February 9, 2016, the U.S. Supreme Court issued a stay of the EPA’s Clean Power Plan. As a result, the EPA can’t implement the rule until all legal challenges are resolved.

Of the ten analysts covering Cloud Peak Energy (CLD), two gave it a “buy” rating, six gave it a “hold” rating, and two gave it a “sell” rating.

The Clean Air Act is a national air pollution control policy that regulates the emission of hazardous pollutants from stationary and mobile sources in the United States.

Royalties and various expenditures related to leasing of land form a major portion of cash outflows for companies operating in the Western region.

Coal mining companies incur significant expenditure in complying with all applicable federal and local laws.

Major demand-side indicators for coal include electricity consumption and steel production.

According to the EIA, low sulphur content coal is defined as having less than 0.60 pounds of sulphur per million British thermal units.

According to the World Coal Association estimates, coal recovery in surface mining in the US is more than 90%.

According to the World Coal Association, there are two main underground mining methods in the US.

Land ownership in the US can be broadly divided into the following categories: federally owned land, state-owned land, privately owned land, and Native American land.

Peabody Energy (BTU), Arch Coal (ACIIQ), Cloud Peak Energy (CLD), and Alpha Natural Resources (ANRZQ) are the top four coal-producing (KOL) companies in the Unites States.

Coal types differ from each other as a result of the difference in their organic matter content and maturity.

Peabody Energy (BTU) reported $1.42 billion as consolidated revenue for 3Q15. Analysts estimate it will report $1.35 billion in 4Q15, almost 5% less on a QoQ basis.

For the week ended January 8, natural gas inventory came in at 3,475 Bcf (billion cubic feet) compared to 3,643 Bcf a week earlier.

During the restructuring process, Arch Coal hopes to continue its normal course of business with cash generated from ongoing operations, existing liquidity, and new financing.

Arch Coal stockholders may not get anything from the restructured business, as the company is already insolvent, according to its latest 10-Q filing.

Increased environmental scrutiny in power generation and steel production has an indirect impact on coal mining companies like Arch Coal. Power producers have been impacted the most by the Clean Air Act.

On January 11, 2016, Arch Coal (ACIIQ) filed for Chapter 11 bankruptcy. Although its bankruptcy was widely anticipated, stocks of major coal mining companies took a hard fall after the news.