Peabody Energy Corp
Why Alpha Natural Resources’ Massey Energy acquisition got messy
Alpha Natural Resources sold 84.8 million tons of coal in 2010 at an average price of $41.2, generating revenues of $3.9 billion.
Challenges before Peabody Energy’s US operations in fiscal 2015
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.
Must-know: Why Peabody Energy fell 1.9% on July 22
Wall Street analysts’ consensus estimate for loss per share was $0.289.
Why Most Analysts Recommend a ‘Hold’ for Cloud Peak Energy
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.
Analysts Expect Peabody Energy’s Revenues to Rise in 3Q17
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.
How Low Demand Affected Westmoreland’s 1Q17 Cash Flows
In 1Q17, Westmoreland Coal Company (WLB) spent $7.2 million on capital expenditure, which resulted in free cash flow of $42.6 million.
Why Genesee & Wyoming’s North American Traffic Rose in April
Genesee & Wyoming’s North American railcar traffic expanded 4.9% YoY (year-over-year) on a same-railroad basis in April 2018.
Which Commodities Pulled Down CSX’s Carloads in the Week?
In the week ended October 1, 2016, CSX’s overall carloads reported a fall of 5.6% compared to the week ended October 3, 2015.
Why stagnant electricity demand is bad for coal companies
In 2013, electricity generation growth was mainly due to increased demand towards the end of the year. Electricity demand increased because of the severe winter.
Natural Gas Chipped Away at Coal’s Market Share in 2015
In 3Q15, natural gas beat coal in market share every month. The rise of natural gas is bad news for coal producers.
Why economy and politics drove Walter Energy up in November
In this year’s midterms, Republicans took control of Congress. Republicans oppose the U.S. Environmental Protection Agency’s (or EPA) new regulations requiring coal-fired power plants to reduce carbon emissions.
Why we’re not seeing capacity additions from coal-fired plants
The first half of 2014 saw 4,350 MW (megawatts) of new electricity generating capacity, according to the EIA (Energy Information Administration). Of this, 2,319 MW, or 53.3%, was natural gas–fired.
Why Bankruptcy Could Be around the Corner for Arch Coal
Since the end of 3Q15 until December 17, Arch Coal has lost 72% compared to Peabody Energy’s (BTU) 64% and Cloud Peak Energy’s (CLD) 23% during the same period.
Union Pacific’s Carloads Slide Less than Rival BNSF Railway’s Railcars
Union Pacific’s combined coal and coke carloads fell by 26.2% in the latest reported week of 2016 on a year-over-year basis.
Must-know: Moody’s Peabody Energy rating explained
As noted earlier, stocks of companies with a higher share of revenues from met coal have lost more since the beginning of the year. Peabody Energy’s performance confirms this assertion.
Challenges facing Peabody Energy’s Australian business
China announced an import ban on high-sulfur, high-ash coal, effective 2015. Since Australian thermal coal contains high levels of sulfur, the ban is expected to hit Australian thermal coal exporters, Peabody Energy included.
A lower-than-expected natural gas draw-down – what does it mean?
According to the EIA, 115 Bcf of natural gas was drawn out during the week ending January 30. It was a lower-than-expected draw-down.
CSX Trails Norfolk Southern in Total Railcar Units
In the week ending March 26, 2016, CSX’s (CSX) railcar units, excluding coal and coke, fell by 8.0%.
How Westmoreland Coal Maintains Positive Cash Flow Each Quarter
Range-bound margins Since the majority of Westmoreland Coal’s (WLB) contracts are long-term cost-protected contracts, its margins are protected. Many contracts have high-margin reclamation. The company’s EBITDA[1.earnings before interest, tax, depreciation, and amortization] margins have remained between 10% and 26% during the last six quarters. This trend contrasts with that followed by other major coal producers (KOL) such as […]
Why More Than Half of Analysts Rate Cloud Peak Energy a ‘Hold’
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.
Uptick in price of natural gas gives hope to coal producers
The marginal increase in natural gas prices last week is good news for coal producers (KOL), especially the ones in the Appalachians and the Midwest.
Why ANR’s met coal and logistics businesses face challenges
China’s economy grew 7.3% in the third quarter—that’s the slowest pace in five years. A slowdown in China’s growth means less demand for steel. This leads to less demand for met coal.
Must-know: Why coal producers are wary of the EPA’s proposal
Generally, natural gas burns more cleanly than coal. Coal has the highest carbon intensity among major fossil fuels.
PRB coal producers may benefit from restocking at utilities
At the beginning of winter, the PRB coal producers are struggling to get enough rail cars to meet utilities’ demand. The PRB coal producers may see increased demand well into 2015.
Coal Prices Stabilized Last Week after the Previous Week’s Fall
PRB coal prices have remained under pressure since the start of the year due to low natural gas prices.
Westmoreland Coal Posts Net Losses in 2Q17
WLB’s operating loss from its Canadian Coal Mining segment came in at ~$11.7 million compared to its operating income of ~$3.6 million in 2Q16.
These Commodities Pulled Down Norfolk Southern’s Shipments in Week 6
n the sixth week of 2018 (ended February 10), Norfolk Southern (NSC), a major Eastern US railroad, saw a 2.4% fall in its carload traffic.
Natural gas prices stay pressured on a predicted warmer winter
Natural gas prices and coal’s market share in electricity generation highly correlate. When natural gas prices rise, coal gains market share.
Appalachian Coal Price Rose in the Last Week of September
During the week ended September 29, 2017, spot coal prices for the Powder River Basin and the Illinois Basin closed at the same price as the previous week.
How Kansas City Southern’s Carloads Reversed the Trend
In the week ending May 21, 2016, Kansas City Southern’s total railcars rose by 1% YoY, moving 22,600 railcars, as compared to 22,400 one year previously.
Powder River Basin Coal Breaks the $10 Barrier: Will It Stay Up?
Powder River Basin coal prices averaged $10.55 per ton for the week ended July 24. Prices averaged above $10 a ton for the first time in the last five weeks.
Intermodal Traffic Growth Pushed Union Pacific’s Volumes in Week 16
In Week 16, Western US rail freight giant Union Pacific (UNP) saw its carload traffic rise slightly, by 0.6% YoY (year-over-year) to 92,300 carloads excluding intermodal units from ~91,800 units.
US Electricity Generation Rises in Week Ended September 4
Electricity generation in the US increased to 86.8 million MWh for the week ended September 4, a 4% increase from the previous week’s 83.5 million MWh.
Coal Prices Remain Constant in Week Ended September 8
During the week ended September 8, 2017, PRB spot coal prices closed at $11.50 per short ton, the same as the previous week’s price.
Despite a Rise in Coal, CSX’s Volumes Fell in Week 16
In the week ended April 22, 2017, CSX Corporation’s (CSX) overall railcar volumes fell ~0.6% YoY (year-over-year).
Is it too late for Walter Energy to start idling mines?
Walter Energy (WLT) made the decision to idle its Canadian operations too late—it was hoping for revival in the metallurgical coal demand and prices—the company’s Canadian and UK operations failed to breakeven even in 2Q13 when the cash costs exceeded the net selling price by over $20 a ton.
How Canadian Pacific Railway’s Volumes Compare
In the week ended March 17, 2018, or Week 11, Canadian Pacific Railway’s (CP) carload traffic rose 6.9%.
Walter Energy’s 3Q14 EBITDA drops despite cost saving measures
While Walter Energy (WLT) has been able to reduce costs, the cost savings have not been able to compensate for the drop in revenues.
Rising Natural Gas Inventory Makes Coal Producers Sweat
The change of 94 Bcf in the underground natural gas inventory during the week of August 28 came in higher than Wall Street analysts’ expectation of 84 Bcf.
Must-know: India’s coal industry
At the end of 2013, India’s coal sector was 60.6 billion tons. India has the fifth largest coal reserves in the world. However, India’s coal quality is low. It has a high ash content. The majority of India’s coal reserves are located in the eastern states. Southern India has the most lignite reserves in the country.
Crude oil prices recover a bit—what does it mean for coal?
Crude oil prices as of January 22 Crude oil prices recovered marginally during the week ended January 22, 2016. WTI (West Texas Intermediate) crude oil prices closed at $30.99 per MMBtu (million British thermal units) on January 22, 2016, compared to the closing price of $29.42 per barrel on January 15, 2016. Meanwhile, Brent crude […]
How Did BNSF’s Carloads Perform against Rival UNP’s?
BNSF Railway (BRK-B) operates in the Western US, competing with Union Pacific (UNP).
Cloud Peak Energy: How Does the Company’s Near Future Look?
While its sales came in lower than analyst estimates, Cloud Peak Energy (CLD) beat analyst estimates on the adjusted net losses front in 2Q15.
Coal producers are feeling the heat
So far, the milder weather this winter kept natural gas prices subdued. As a result, coal producers (KOL) are under pressure. The current environment isn’t encouraging for coal.
Peabody Energy and Alliance Resource dominate the Illinois Basin
Peabody (BTU) is the largest reserve holder. It’s the second largest producer in the ILB. It shipped 30 million tons in 2013. The company runs three underground mines and five surface mines in the region. BTU’s coal is shipped to utilities in the region. It’s also exported to Europe through the Gulf Coast.
Must-know: An overview of the US coal industry
With just under a billion tons produced in 2013, the U.S. ranks second in coal production. China is the largest producer with 3.7 billion tons. However, the U.S. holds much higher coal reserves at 237 billion tons—over a quarter of the world’s coal reserves. China has coal reserves at 114 billion tons. At the current consumption rate, the U.S. reserves can last for over 200 years.
What’s Next for Walter Energy?
Walter Energy’s (bankruptcy is a part of restructuring plan negotiated with its creditors. The ownership of Walter Energy’s Alabama and Virginia assets will pass on to the senior creditors.
Falling Temperatures Give Energy to Coal Producers and Utilities
More than 90% of the coal produced in the US is used for the generation of electricity, meaning that the power utility segment is coal’s largest end user.
Kansas City Southern’s Carloads Rolled against the Tide, Up 6.6%
In the week ended November 5, 2016, Kansas City Southern’s (KSU) total railcars rose 6.6% compared with the corresponding period in 2015.
Why Did CSX’s Carloads Rise in the Week Ending July 2?
CSX (CSX) is a major operator in the Eastern US that competes with Norfolk Southern (NSC).
Why the Powder River Basin produces more coal with fewer mines
The western region in the U.S. includes the area west of the Mississippi River. The region produced 520 million tons of coal for the 12 months ending September 11, 2014. The entire U.S. produced 974 million tons of coal during the same period. The western region accounted for 53% of the total coal production in the U.S. It’s important to note that 13 out of 24 western states produce coal.
Why Russian coal could hinder US coal exports to China
Coal accounts for less than a 20% share in electricity generation in Russia (RSX). Coal production is much higher than the domestic demand. As a result, most of Russia’s thermal coal is exported.
How CSX’s Carloads Compared with Industry Volumes in Week 6
In the sixth week of 2018 (ended February 10), CSX posted a 9% loss in carload traffic.
Coal Spot Prices Remained Steady in the Week Ended October 20
During the week ended October 20, 2017, coal spot prices from all the regions remained steady compared to their prices in the week ended October 13.
A Huge Fall in Coal Pulls Down CSX Corporation’s Carloads
In the week ended June 18, 2016, CSX Corporation’s carloads excluding coal and coke fell by 3.6%
Inside Norfolk Southern’s Railcar Traffic Mix in Week 7
Norfolk Southern’s intermodal volumes were up 8.3% in the seventh week of 2018.
Coal Shipments Continue to Rise amid Weak Natural Gas Prices
According to EIA estimates, US coal shipments increased marginally to 18.7 million tons during the week ending August 28.
Alpha Natural Resources Guides for Lower Coal Prices in 2015
With $3.3 billion of debt still on the books and a coal price recovery nowhere in sight, Alpha Natural Resources’ balance sheet remains under pressure.
How Did Norfolk Southern’s Carloads Compare to CSX’s?
Norfolk Southern (NSC) is a major freight rail carrier in the Eastern US.
Why Coal and Utilities Indicators Matter To Long-Term Investors
Thermal coal is mostly used for electricity generation. So the state of the utilities sector is by far the biggest driver of the coal industry.
Why thermal coal industry indicators are important for investors
Currently, the coal industry is going through heightened volatility. As a result, it makes even more sense for us to cover the short-term indicators.
Why survival is for the fittest of US coal producers
Met coal producers are the worst hit in the current energy environment. Based on our analysis so far, we can conclude that the higher the revenue share of met coal, the steeper the stock prices fell in 2014.
Bowie Resource Transaction: How It Impacts Peabody Energy
According to Peabody Energy’s filings, the proceeds from the transaction with Bowie Resource Partners are crucial for it to meet future financial covenants.
Why Rio Tinto’s Kestrel Ramp-Up Keeps Coal Volumes Going
RIO’s hard coking coal production was up 10% YoY to 4 million tons in 9M15 due to improved production rates at Kestrel.
Understanding Arch Coal’s acquisition of International Coal Group
International Coal Group Acquisition
Like Alpha Natural Resources, Arch Coal couldn’t resist the urge for inorganic growth when coal prices rose.
Why should you track thermal coal industry indicators?
Currently, the coal industry is going through heightened volatility. As a result, it makes even more sense for us to cover the short-term indicators.
Rio’s Energy segment: Weaker prices offset cost reductions
Rio Tinto’s (RIO) Energy segment reported an underlying loss of $210 million—compared to underlying earnings of $33 million in 2013.
Commodities that Pulled Down CSX’s Carloads in Week 4
In the week ended January 27, 2018, CSX lost around 2,000 carloads compared with the week ended January 28, 2017.
A Close Look at Kansas City Southern’s Carloads
Kansas City Southern’s carloads In the week ended February 18, 2017, Kansas City Southern’s (KSU) total railcars rose 12.6% from the corresponding week of 2016. In the same week, KSU hauled over 25,000 railcars, compared with 22,000 units in the week ended February 20, 2016. Carloads other than coal and coke rose 8.9% YoY (year-over-year). […]
Must-know: Will Walter Energy survive the downturn?
The cash burn has forced the company to refinance the term loan with high cost notes—the move has simply extended the lifeline at the cost of higher interest expenses going forward—the company now has no major repayment obligation until 2018.
No Change in Coal Prices Week-Over-Week
Powder River Basin coal prices Powder River Basin (or PRB) coal stood at $12.10 per short ton on November 24, 2017. PRB coal prices have not changed for the last three weeks. PRB has surface mines, where sub-bituminous coal is mined. These surface mines, located in Wyoming and Montana, are in the lowest-cost coal mining region in […]
Coal Prices Have Been Steady Week-over-Week
Powder River Basin (or PRB) coal prices settled at $12.10 per short ton when the market closed on December 1, 2017. The prices were constant for all of November.
Canadian National Railway’s Freight Volume Trends in Week 13
Canadian National Railway’s carload traffic in Week 13 Canadian National Railway (CNI), Canada’s largest rail freight carrier, saw its carload traffic rise 5.6% YoY (year-over-year) in Week 13 of 2018, to 64,500 railcars (excluding intermodal) from 61,100. In contrast, Canadian Pacific Railway’s (CP) carload traffic fell 2.2%. Canadian National’s carload volumes rose more than Canadian railroads overall in Week […]
Why Did CSX’s Carloads Rise?
CSX’s carloads In the week ended February 18, 2017, CSX’s (CSX) overall railcar volumes rose 6.6% YoY (year-over-year). In the seventh week of 2017, CSX hauled ~72,000 railcars, compared with 67,000 plus railcars in the same week last year. CSX’s carloads, excluding coal and coke, rose 3.7%. If you want to compare this week’s freight volume […]
Indicators affect regional coal producers differently
Peabody Energy (BTU), Arch Coal (ACI), and Cloud Peak Energy (CLD) are major coal producers that operate in the Powder River Basin region.
China—global iron ore and met coal industry’s lifeline
China accounts for almost half of the world’s raw steel production. In 2013, China produced 779 million tons of steel. This was a 7.5% increase over 724 million tons in 2012.
What Happened to Cloud Peak’s Decker Coal?
In December 2008, when Rio Tinto Energy (RIO) transferred its Western US operations to Cloud Peak Energy, it included a 50% stake in Decker Coal.
CSX’s Freight Volumes: How It Stacked Up against Its Peers
In the week ended April 1, 2017, total freight volumes of CSX (CSX) dipped to 4.6% year-over-year.
Westmoreland Coal Company is probably the strongest US coal name
Westmoreland Coal Company (WLB) operates a unique business model of supplying coal to power plants in the vicinity of mines through cost-effective transportation modes on long-term, cost-protected contracts.
Rise in Non-Coal Volumes Limits Fall in Kansas City Southern’s Carloads
In the week ended September 3, 2016, Kansas City Southern’s (KSU) total railcars fell by 0.75% compared with the corresponding period in 2015.
Analyzing Walter Energy’s 1Q15 Costs and Profitability
Walter Energy’s 1Q15 net losses were $80.2 million, compared with $92.2 million in 1Q14. The lower net loss largely resulted from a $58.6 million gain on the extinguishment of debt.
China’s thermal coal imports—who benefits?
Apart from shipping companies, coal producers (KOL) around the world benefit from China’s coal imports. However, competition in the Pacific market remains steep.
Did last week’s indicators impact thermal coal prices?
Central Appalachian thermal coal prices came in at $50.90 per ton for the week ending February 6. Coal prices increased—despite the fall in natural gas prices.
Kansas City Southern’s Carloads: Unfazed by Coal Volume Slump
In the week ended December 10, 2016, Kansas City Southern’s (KSU) total railcars rose 1.7% compared to the corresponding period in 2015.
A Summary of Kansas City Southern’s Freight Volumes in Week 9
In the ninth week of 2018, US-Mexico commerce-on-rail Kansas City Southern registered a 4% fall in its carload traffic.
Coal Prices Stay Put in Winter 2017
For the week ended December 15, Powder River Basin (or PRB) coal prices came in at $12.10 per short ton. PRB coal prices have remained at the same rate since November 10.
Coal Shipments Rise as Temperatures Drop
According to the EIA, US coal shipments rose to 16.1 million tons in the week ending December 4, compared to 15 million tons in the week ending November 27.
Where Cloud Peak Energy’s Stock Is Trading next to Peers
On August 17, 2017, Cloud Peak Energy (CLD) had a forward EV-to-EBITDA multiple of 5.5x.
Spot Coal Prices Remained Flat in the Week Ending November 3
Powder River Basin coal settled at $11.75 per short ton, while Illinois Basin spot coal prices closed at $32.60 per short ton.
Why natural gas injections affect thermal coal demand
Coal’s share in electricity generation is down from over 50% in 2004 to 39% in 2013. During the same period, natural gas’ share increased from 18% to 27.5%.
How Norfolk Southern’s Shipments Trended in Week 9
In the week ended March 3, 2018, Norfolk Southern saw a ~2% fall in carload traffic. It hauled ~67,700 carloads in the week.
Must-know: State of the US metallurgical coal industry
Metallurgical coal exports have grown especially since 2007, when supply constraints in the Pacific market resulted in fast-growing Asian countries, notably China, importing metallurgical coal from the U.S. U.S. exports to China grew from just 12 thousand short tons in 2007 to 10.6 million short tons in 2012.
What Does a Spike in Coal Power Plant Utilization Rates Mean?
The EIA published its latest report on capacity factors for power plants on July 27. Coal-based power plants surpassed natural gas-based power plants in utilization.
Walter Energy’s Path to Bankruptcy: The Beginning
Western Coal acquisition As we discussed in the previous part, Walter Energy traded under a dollar for more than a quarter until trading was suspended on the NYSE on July 8. The seeds of the fall were sowed back in 2011. Walter Energy filed for Chapter 11 bankruptcy on July 15, 2015. On April 1, […]
Cloud Peak Energy’s 2Q15 Shipments: Potential Risk Factors
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.
Kansas City Southern’s Carloads Rolled against the Tide, Up 7.2%
In the week ended November 12, 2016, Kansas City Southern’s coal and coke railcar units fell 6%.
Inside Canadian Pacific’s Freight Volumes in Week 52
For the 52nd week of 2017 (ended December 30), Canadian Pacific Railway (CP) witnessed a 9.1% fall in its carload traffic.
Why Kansas City Southern’s Railcar Traffic Fell in Week 13
The smallest US Class I railroad, Kansas City Southern (KSU), reported a high-single-digit fall in its carload traffic in Week 13 of 2018.
Why Kansas City Southern’s Carloads Jumped
In the week ended March 11, 2017, Kansas City Southern’s (KSU) total railcars rose 21% from the corresponding week of 2016.
Key Update: Supreme Court Hands Rare Victory to Coal on MATS
In a landmark 5–4 ruling on June 29, the Supreme Court ruled that the EPA unreasonably interpreted the Clean Air Act in writing the original form of its 2012 Mercury and Air Toxic Standards.