Market Vectors® Coal ETF
The must-know dynamics of the global power industry
In this series, we’ll look at the structure of the thermal power industry before moving on to focus on the power generation equipment sector.
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.
Understanding Arch Coal’s Financial Position
Arch Coal’s leverage On June 30, 2017, the book value of Arch Coal’s (ARCH) long-term debt was about $315.6 million, of which ~$297 million is due for payment in 2024. Arch Coal’s leverage, which is its net debt divided by EBITDA (earnings before interest, tax, depreciation, and amortization), has increased since the acquisition of International […]
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.
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.
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 […]
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.
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.
How Low Natural Gas Prices Could Impact Coal Miners
Henry Hub benchmark natural gas prices came in at $3.01 per MMBtu for the week ended September 30, 2016. This compares to $3.11 per MMBtu for the previous week.
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.
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.
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.
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.
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 […]
What Are Analysts’ Ratings for Westmoreland Coal?
Of the four analysts covering Westmoreland Coal (WLB), 100% or four analysts gave the company a “buy” rating. There weren’t any “sell” or “hold” ratings.
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.
Gauging Arch Coal’s Net Losses and EBITDA in 3Q15
Arch Coal reported adjusted EBITDA of $134.8 million in 3Q15 compared to $71.9 million in 3Q14 despite the pricing pressure it experienced during 3Q15.
What Could Drive Arch Coal Stock in 2017?
Although the majority of coal (KOL) stocks began 2016 on a weak note, they outperformed the broader market in 2016.
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.
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 Cloud Peak Energy is well positioned to survive the downturn
Unlike its peers (KOL) like Walter Energy (WLT), Alpha Natural Resources (ANR), and Arch Coal (ACI), Cloud Peark doesn’t have any exposure to metallurgical 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.
What to Expect from Major Coal Mining Companies in Their Future Earnings
Alliance Resource Partners (ARLP) revised its fiscal 2016 shipments guidance to 36.5 million–37.0 million tons from its prior guidance of 35.0 million–36.0 million tons.
Introducing Alliance Resource Partners: A Company Overview
In this series, we’ll explore how Alliance Resource Partners has expanded its business and evaluate its key operational metrics and financial position.
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.
Factors Driving Major Coal Company Stocks So Far in 4Q16
Stocks of all major coal mining companies remained upbeat after the US election results on November 9, 2016. The recent rally in natural gas prices helped coal stocks continue their momentum so far in December 2016.
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.
Coal Spot Prices Remain Steady for the Second Month
On December 18–22, the PRB and Illinois Basin coal prices remained at $12.10 per short ton and $32.60 per short ton, respectively.
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.
Understanding the Master Limited Partnership Structure of Alliance Resource Partners
As of December 31, 2016, Alliance Resource Partners was being managed by its MGP, which is 100% owned, directly and indirectly, by AGHP.
A Closer Look at Arch Coal’s Financial Position and 2017 Guidance
Arch Coal’s (ARCH) 4Q16 earnings were driven by a strong rebound in metallurgical coal prices.
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.
What Factors Could Drive Arch Coal Stock in 2H17?
1H17 in review Majority of the coal (KOL) stocks began 2017 on a weak note. The stocks have not been able to recoup from the slump until now. They have been outperformed by the broader market and the VanEck Vectors Coal ETF so far in 2017. On September 19, 2017, Arch Coal (ARCH) has fallen […]
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.
Coal is losing its market share in China’s electricity generation
Coal is the cheapest fossil fuel, but it’s also the most polluting. With its massive electricity generation capacity—mainly coal-fired—China emits the most carbon dioxide in the world.
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.
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.
Evaluating Arch Coal’s Bituminous Thermal Coal Costs in 3Q15
Operating costs for Arch Coal’s bituminous thermal segment dropped in 3Q15. Operating cost per ton hit $24.63, higher than in 3Q14 but lower than in 2Q15.
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.
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.
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.
Natural Gas Prices Lean Hard on Coal in Mid-December
Henry Hub benchmark natural gas prices rose in the week leading up to December 11. But the benchmark natural gas price fell to $1.77 per MMBtu on the day.
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%.
What’s Driving Rio Tinto’s Energy and Minerals Division?
Rio Tinto’s (RIO) Energy and Minerals division now includes coal, iron ore pellets, titanium dioxide, borates, salt, and uranium.
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.
How Arch Coal’s Rise in Bituminous Thermal Coal Volumes Hurt Prices in 3Q15
Arch Coal’s Bituminous Thermal coal segment sold 2.3 million tons in 3Q15 compared to 2.2 million tons in 3Q14 and 1.9 million tons in 2Q15.
Why Are Analysts Rating Westmoreland Coal a ‘Buy’?
Of the three analysts covering Westmoreland Coal (WLB), 100% (three analysts) gave the company a “buy” recommendation.
Why Did Coal Stocks Soar after the US Election Results?
The Republicans won the majority of the major coal-producing (KOL) states in the United States such as Wyoming, West Virginia, Kentucky, Pennsylvania, and Montana.
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.
Westmoreland Coal’s Canadian Operations: An Overview
Westmoreland’s Canadian operations Westmoreland Coal (WLB) acquired seven surface mines in Alberta and Saskatchewan, a stake in an activated carbon plant, and a char plant in Canada from Sherritt International in 2014. As of January 1, 2016, WLB’s Canadian operations are grouped as one entity, Prairie Mines & Royalty ULC. Its Canadian operations hold total […]
Coal under Pressure as Natural Gas Prices Fall Again
Natural gas prices ended the September 4 week in red. Low natural gas prices have eaten away market share from coal in electricity generation.
Why Natural Gas Dented Arch Coal’s Appalachia Segment in 3Q15
Arch Coal’s Appalachia segment shipped 3 million tons of coal in 3Q15, down from 3.6 million tons in 3Q14, including 1.6 million tons of metallurgical coal.
Coal Prices in All Major Regions Remain Steady
For the week ending September 4, Powder River Basin spot coal prices averaged $10.7 per ton—$0.17 higher than the price for the week ending August 28.
The Flip Side of Alliance Resource Partners’ Business: Key Risks
As of June 30, 2017, ARLP’s long-term contracts totaled ~38.0 million tons for 2017, 20.1 million tons for 2018, and 11.0 million tons for 2019.
What Do Rising Crude Oil Prices Mean for Coal?
Crude oil prices rose for the second straight week, albeit at a slower pace. When crude oil production rises, there are fewer railcars available to transport coal.
What Could Drive Alliance Resource Partners Stock in 2017?
The majority of coal stocks began 2016 on a weak note. But they outperformed the broader market in 2016—mostly through gains in the second half of 2016.
Walter Energy Is Preparing for Chapter 11 Bankruptcy
On July 15, Walter Energy filed for Chapter 11 bankruptcy. This passes control over the company to its senior creditors. Junior debt holders will have to let go of their claims.
Inside Alliance Resource Partners’ Mining Operations
Alliance Resource Partners (ARLP) operates eight underground mining complexes in two regions: Illinois and Appalachia.
Coal Prices Have Been Constant Week-over-Week
The coal prices in the Powder River Basin (or PRB) reached $12.10 per short ton for the week ended December 8, 2017.
Rising Coal Prices May Not Be Good News for U.S. Steel
Rising coking coal prices could lead to a higher input cost for U.S. Steel. It would be at a disadvantage compared to mini mills.
Analyzing Arch Coal’s Powder River Basin Cost Drops in 3Q15
In 3Q15, Arch Coal’s PRB operating cost per ton came in substantially lower, at $11.71 per ton compared to $12.42 in 3Q14.
Must-know: The EPA helped a coal producing region
The Illinois Basin produced ~120 million tons of coal during the 12 months ending September 13, 2014. This was ~65% of the interior region’s total production of 185 million tons during the same period. With estimates reserves of ~50 billion tons, the basin ranks second only to the gigantic PRB.
BHP Billiton Revised Its Coal Costs. Here’s Why
Coal is one of the key commodities for BHP and contributes 21% of its revenues and 20% if its underlying EBITDA.
Powder River Basin Coal Spot Prices Recovered Sharply
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.
How Arch Coal’s Leverage and Liquidity Compare
Arch Coal’s debt According to Arch Coal’s (ARCH) latest 10-Q filings, the book value of its long-term debt is ~$315 million, of which a term loan of ~$297 million is due for payment in 2024. It is also subject to quarterly principal amortization payments of $750,000. Arch Coal’s interest expenses were ~$6.0 million in 2Q17 […]
Could Arch Coal’s Debt Lead the Company to Bankruptcy?
Most American coal producers are building liquidity through various means to make sure they survive the downturn and avoid bankruptcy.
US Electricity Generation Remains Steady, But Will Coal Producers?
The latest EEI report for the week ending January 15, shows that US electricity generation jumped to 79.7 million MWh from 79.2 million MWh the week before.
Natural Gas Prices Rise Marginally—But Not Enough to Boost Coal
Henry Hub benchmark natural gas prices came in at $2.22 per MMBtu on January 22, 2016. This compares to $2.18 per MMBtu on January 15, 2016.
How Westmoreland Coal’s Business Model Differs from Peers’
Business model Westmoreland Coal (WLB) has a different business model than American coal producer (KOL) peer Arch Coal (ARCH), Alpha Natural Resources (ANRZQ), and Peabody Energy (BTU). Contract Westmoreland Coal’s contracts are long term and cost protected. According to company filings, its weighted average contract life (contract life weighted by tonnage) extends to 2022. Low-cost supplier […]
Coal Prices Remain Steady in Week Ended November 17
Power River Basin coal prices In the week ended November 17, 2017, PRB (Power River Basin) coal prices closed at $12.10 per short ton, the same price reported at the end of the previous week. PRB produces sub-bituminous coal from surface mines, which make it a low-cost coal mining area. These coal reserves are located in […]
Natural Gas Inventory High Enough to Pressure Coal
A rise in natural gas inventory is a good indication that winter is over. If inventory is higher than expected, then so is expected supply.
Clean Coal: The Future of the US Coal Mining Industry
Clean coal aims to minimize the emission of harmful greenhouse gases with clean coal technologies.
Westmoreland Coal Company’s 3Q 2014 cost performance
With coal prices plummeting, WLB took a $24 million non-cash charge on derivative contracts. The company also reported interest expenses of $21.3 million in 3Q 2014 compared to $9.9 million in 3Q 2013.
Natural Gas Inventory Tops Expectations: Bad for Coal
Natural gas inventory has risen over the past few weeks since the injection season has started. If inventory is higher than expected, it indicates a higher-than-expected supply, which pressures natural gas prices. A fall in natural gas prices hurts coal producers.
Natural Gas Inventories and Coal in Week Ended September 1
When the prices of other fuels are more attractive, the demand for coal can fall, and when other fuel prices increase, coal can become more attractive.
Why you should care about the EPA’s war on coal
Coal is the cheapest energy source. But it’s also the most polluting fossil fuel. Power plants emit harmful airborne pollutants like mercury, arsenic, nickel, and sulfur dioxide.
Will a Republican majority affect the coal industry?
Deadlock may continue The Republican majority in Congress can create trouble for President Obama’s projects. These projects include an immigration bill, Obamacare, and a quest for cleaner energy. But Obama has vowed to use his executive powers to make way for some of these bills. With the next presidential elections two years away, we may see a […]
Must-know: ANR’s thermal coal business in 3Q14
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.
Why Cliffs wants to operate North American coal at zero EBITDA
Cliffs maintained its full-year 2014 North American coal expected sales and production volume of 7 million tons. Sales volume mix is anticipated to be ~70% low-volatile metallurgical coal, 20% high-volatile metallurgical coal, and 10% thermal coal.
Why working capital management saved the day for Peabody
The company’s accounts receivables reduced to $447 million on June 30, 2014 from $557.9 million on December 31, 2013.
How Does Vale Plan to Unlock Value in Coal?
Vale’s (VALE) focus in its coal division is on stabilizing the business, which is why it’s not bothered by the flat growth in production.
What Teck Resources Investors Could Expect in 2018
Asia is the biggest market for Teck Resources’ coal division, accounting for 75% of its shipments.
Natural Gas Inventory Remains below the 5-Year Average
During the winter, the demand for natural gas increases in the US. In previous weeks, the supply continued to be below the five-year average.
Coal Production Continues to Fall
On December 21, the EIA released the estimate of the coal volumes produced in the US for the week ending December 16.
Crude Oil Prices Rise: Will It Impact Coal Miners?
On December 21, 2017, the price of Brent crude oil was $64.90 per barrel—up 2.6% from $63.23 per barrel recorded on December 15.
Natural Gas Prices Continue to Fall
In the EIA’s STEO report, it predicted that the Henry Hub natural gas benchmark price would average $3.12 per MMBtu in 2018.
Analyzing Coal Production’s Recent Fall
On December 14, the EIA (Energy Information Administration) issued its coal shipment estimates for the week of December 9.
Will the Marginal Drop in Crude Oil Prices Hit Coal Miners?
On December 15, Brent crude oil settled at $63.23 per barrel—0.3% below the $63.40 per barrel reported on December 8.
Why Natural Gas Prices Keep Falling despite the Onset of Winter
The January 2018 US natural gas futures contract price settled at $2.74 per MMBtu (million British thermal units) while the Henry Hub natural gas spot price was $2.71 per MMBtu when the market closed on December 18.
Natural Gas Inventories Down: Positive for Coal?
Inventories are a significant driver of commodity prices. In this part of our series, we’ll focus on inventory levels for natural gas.
Coal Production Rebounded in the Week Ended December 2
For the week ended December 2, 2017, coal production rose sharply to 15.7 MMst (million short tons) from 14.1 MMst in the previous week.
Are Coal Miners Impacted by a Fall in Crude Oil Prices?
On December 8, 2017, the price of WTI crude oil was $57.36 per barrel. This price was nearly 2.0% below the price of $58.36 per barrel when the market closed on December 1.
Chart in Focus: Natural Gas Prices and the Henry Hub Benchmark
The January 2018 US natural gas futures contract price settled at $2.83 per MMBtu (million British thermal units) when the market closed on December 11, 2017.