Peabody Energy Corp

The retirement of coal-fired power plants and the impact of new regulations proposed by the EPA present two major blows to the US thermal coal industry.

Wall Street analysts’ consensus estimate for loss per share was $0.289.

Of the nine analysts covering Cloud Peak Energy (CLD), seven analysts rated its stock as a “hold,” and two gave CLD a “buy” or “strong buy” rating.

In 3Q15, Peabody Energy (BTU) reported $1.42 billion in revenues. Analysts anticipate that it will post $1.46 billion in 3Q17 compared to $1.26 billion in 2Q17.

Powder River Basin coal settled at $11.75 per short ton, while Illinois Basin spot coal prices closed at $32.60 per short ton.

In the week ended March 3, 2018, Norfolk Southern saw a ~2% fall in carload traffic. It hauled ~67,700 carloads in the week.

Cloud Peak Energy (CLD) shipped 16.0 million tons of coal from its three owned and operated mines in the Powder River Basin (or PRB) in 2Q15.

Why are we combining thermal coal and power indicators? Thermal coal is mostly used for electricity generation.

At launch, RAAX had a small weighting to coal, but in May, this exposure was completely eliminated based on falling coal equity prices and weakening supply and demand data.

During the week ended November 10, 2017, PRB coal closed at $12.10 per short ton, which was ~3% higher than $11.75 per short ton that coal maintained for the past five weeks.

ANR produces thermal coal from its mines in the Appalachian and Powder River Basin (or PRB). The company had around three billion tons of thermal coal reserves.

On October 13, 2017, Brent crude oil prices settled at $57.17 per barrel, 3% higher than $55.60 reported during the previous week.

On October 16, the November US natural gas futures contract price was reported as $2.95 per MMBtu.

Commodity price risk Arch Coal (ARCH) has long-term coal supply agreements for their non-trading, thermal coal sales, hence managing commodity risk for thermal coal and also to a limited extent, through the use of derivative instruments. However, sales commitments in the metallurgical coal market are typically not long-term in nature and are subject to fluctuations […]

BNSF’s total railcars for the week ended February 25, 2017, rose 2.3% YoY to more than 92,000 units.

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

In the week ending May 21, Union Pacific’s total railcars declined by 13.5% YoY to ~86,000 units, which was down from ~99,000 units one year previously.

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.

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, 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.

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

Crude oil prices dropped significantly during the week ended January 15, 2016. WTI (West Texas Intermediate) crude oil prices closed at $29.42 per MMBtu on January 15, 2016.

Peabody Energy’s (BTU) US operations posted revenue per ton of $19.79 in 3Q15, down from $21.24 in 3Q14.

Peabody Energy (BTU) reported Midwest production costs of $32.51 a ton in 3Q15, compared to $34.56 a ton in 3Q14.

Peabody Energy’s (BTU) US operations sold 45.7 million tons of thermal coal (KOL) in 3Q15, 5.2% lower than 3Q14’s 48.2 million tons.

Capacity factors for coal-fired plants fell YoY and rose substantially for natural gas-fired power plants. This shows a shift from coal to natural gas as a fuel for electricity generation.

The EIA’s natural gas inventory report for the week ended August 21 came in at 3,099 billion cubic feet, compared to 3,030 Bcf a week earlier. Natural gas is stored underground to save the fuel for peak demand during the winter.

Arch Coal’s (ACI) shares posted an astounding 205% rise during the week ending August 21. The stock closed at $3.85 on August 21.

On August 4, 2015, Arch Coal completed a reverse stock split to boost its stock price above the dollar mark and stay listed on the NYSE.

Crude oil prices are a mixed driver for the coal industry (KOL) in the United States. On the one hand, a fall in crude oil prices results in a fall in fuel costs.

Central Appalachian thermal coal prices came in at $49.40 per ton for the week ending April 17—down from $50.10 per ton the previous week.

Electricity storage is expensive. Most of the produced electricity is consumed instantaneously. As a result, electricity generation mirrors consumption.

The EIA (US Energy Information Administration) publishes a weekly natural gas inventory and withdrawal report every Thursday.

Coke is used in the iron making process, which in turn is used in the steelmaking process. SunCoke Energy produced 4.2 million tons of coke in 2013.

SunCoke Energy (SXC) is the largest independent manufacturer of coke, which is used in steelmaking. It runs five coke making plants in the United States.

US thermal coal exports were 19.6 million tons in the first half of 2014—down from 26.9 million tons during same period in 2013. The drop was mainly driven by falling demand from Europe.

In the seaborne met coal market, the swing producers are clearly the Australian producers. Australia is the second largest of the met coal producers. It’s the largest met coal exporter.

There’s mistrust in the global commodity markets. From crude oil to met coal and iron ore, producers haven’t cut production. They’re waiting for others to do it first.

The Appalachian coal region is the oldest coal producing region in the U.S.—geologically and commercially. The Appalachian’s coal seams are ~300 million years old. They’re the oldest coal seams in the U.S. Appalachian coal fueled most of the Industrial Revolution after the Civil War in the 19th Century.

Coal mining in the U.S. can be segregated into three main areas: Appalachia, Interior, and West.

Underground mining is more expensive because it’s more capital intensive. Coal companies have to drill more, and use more expensive and complicated machines.

Coal is often called the “buried sunshine” because it developed from the remains of plants and greens that existed as long as 400 million years ago.