Coal News and Markets
Week of May 23, 2004
Coal Prices and Earnings (updated May 21, 2004)
Spot coal prices in the East rose steadily since Labor Day 2003, with rapid escalations starting in late November. Premium Central Appalachian compliance coal spot prices (see graph below) passed the $45.00 per short ton level in the week ended February 13 and passed the $55.00 mark 3 weeks later (week ended March 5, f.o.b. barge, for actual delivery in the prompt quarter). That same week, medium-Btu Pittsburgh seam bituminous coal, cleaned to less than 3 percent sulfur, passed the $45.00 per ton mark, f.o.b. in Northern Appalachia. Spot prices also climbed in the Illinois Basin and Uinta Basin, alternate sources for bituminous coal.
Average spot prices for the 12,500 Btu Central Appalachian coal tracked by EIA peaked at $57.25 per short ton during the weeks ended April 2 and 9. For Northern Appalachia, the 13,000 Btu coal, with 3 percent or less sulfur, average spot prices plateaued at $46.00 per short ton during the weeks ended March 12 through April 23.
For the trading week ended May 21, the following average spot coal prices were added: |
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| Central Appalachia (12,500 Btu, 1.2 SO2, CSX) | $56.50 per short ton, up from $56.00 |
| North Appalachia (13,00Btu <3.0 SO2) | $45.00 per short ton, unchanged |
| Illinois Basin (11,800 Btu, 5.0 SO2) | $31.00 per short ton, unchanged |
| Powder River Basin (8,800 Btu, 0.8 SO2) | $6.50 per short ton, down from $6.75 |
| Uinta Basin (11,700 Btu, 0.8 SO2) | $27.00 per short ton, unchanged |
With spot coal prices high and holding, new term contract prices are reportedly higher than in recent years for coal in the East. Some mines that were temporarily closed or curtailed are coming back on line. Eastern bituminous producers that can perform the additional needed coal preparation and produce good metallurgical coal are tapping into exceptionally high selling prices in the export market, and also benefiting from relatively favorable U.S. dollar exchange rates. High oil prices, signs of a recovering economy, and growing electricity demand set an operating climate with firm price floors and tight coal supplies during the coming months.
Coal Production (updated May 17th)
EIA’s estimates of coal production for 2004, through the week ended May 8, are roughly 3.1 million short tons (mmst), or 0.8 percent, ahead of the same period last year. The net increase, however, is all attributable to production west of the Mississippi River, which is 9.4 mmst higher, year to date, than in 2003. East of the Mississippi, production has not yet risen along with demand, lagging 6.3 mmst behind the same period in 2003. The latest monthly production comparisons (see below), for April 2004 versus April 2003, reveal a 1.7 mmst increase, which equates to a 1.4 percent more production last month than in April 2003.
 Note: This graph incorporates revised MSHA coal production survey data for quarter 4 of 2003, new revisions for quarters 1 through 3 of 2003, and preliminary EIA production estimates through April 2004. |
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Contact(s): Rich Bonskowski
Phone:
202-287-1725
Fax:
202-287-1934
e-mail:
Richard
Bonskowski
Bill
Watson
Phone:
202-287-1971
Fax:
202-287-1934
e-mail:
William
Watson