Coal production across the Appalachian basins rose in the third quarter following gains in seaborne demand.
Production in northern, central and southern Appalachia climbed by 4.6pc to 48.7mn short tons (44.2mn metric tonnes) in the quarter, from 46.5mn st the year before, according to data from the Mine Safety and Health Administration. Around 40pc of the 460 mines in the basins reported a rise in production over July-September.
Output over the first nine months of the year totaled 150mn st, or slightly more than 1.5pc above the 148mn st produced during the same period in 2017.
The third-quarter gain was largely supported by strong demand from overseas for both metallurgical and thermal coals. Prices for prompt 90-day shipments of low-volatile coking coal exports rose to an average $176.80/t fob Hampton Roads, Virginia, up from $159.45/t a year prior.
Seaborne thermal coal prices also rose.
Daily prompt two-month deliveries of 6,000 kcal/kg coals averaged $99.47/t cif Amsterdam-Rotterdam-Antwerp in the third quarter of 2018, up from $87.03/t in the year-ago period.
Production from the Central Appalachian basin rose by 3.77pc to 19.6mn st from 18.9mn st the 2017 third quarter, as producers chased higher prices.
In the first 10 months of 2018, Argus assessed the average price of the prompt-quarter contract for CSX rail-originated 12,500 Btu/lb coals at $64.40/st, up from $55.36 in 2017.
Output from the top 10 producers in Central Appalachia reached 4.95mn st July-September, compared with 4.72mn st in the year-ago quarter. Coronado Coal’s Buchanan mine retained its position as the largest producer, with coking coal output rising to 1.28mn st in the third quarter compared with 1.22mn st the year before.
Pittsburgh seam coals also benefited from higher prices. Overall production in the Northern Appalachian basin rose by 2.51pc in the third quarter to 25.4mn st, from 24.8mn st a year ago. The average price of the prompt-month contract for 13,000 Btu/lb 3.5lb SO2/mmBtu rose to $50.22/st in the previous quarter from $45.75/st a year ago.
The top 10 Northern Appalachian producers were responsible for 73pc of the third-quarter output, or 18.5mn st. This is up from the 17.2mn st from the same group last year.
Murray Energy’s Marshall County mine produced 2.66mn st in the quarter, a slightly lower production level compared with 2017. Nevertheless it was enough to knock Consol Energy’s Bailey mine out of the top spot in terms of output. Production at the Bailey mine dropped by 370,095st to 2.39mn st.
The biggest production jump came in the southern basin. Output there rose by 28pc to 3.65mn st from 2.85mn st last year. High demand, the result of increased steel production, is likely responsible for the third quarter gains. Drummond’s Black Warrior mine held its place as the top producer this quarter with 91,719 st up from 90,513 st in the third quarter of 2017.
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- On November 14, 2018