Northern Appalachian coal producer Consol Energy sold more coal last quarter than a year earlier as the miner extended its reach into export markets and domestic buyer interest returned.
Consol shipped and produced 6.1mn short tons (5.5mn metric tonnes) of coal from its Pennsylvania mining complex in the third quarter, up from 5.3mn st sold in the same three months of 2022. But the average realized price fell to $70.34/st from $72.83/st a year earlier.
The producer’s sales into export markets outpaced sales to domestic power generators for the third consecutive quarter. The company shipped 3.8mn st of coal to international customers during the quarter, up from 2.2mn st a year earlier, according to a filing with the US Securities and Exchange Commission. Consol’s overall exports accounted for 60pc of the company’s revenue last quarter, with 38pc of total revenue coming from export industrial markets and 14pc from export metallurgical markets.
Company export sales last quarter included a shipment to a new country for Consol in south Asia that the company declined to identify. Consol expects to ship another cargo to the same country this quarter, chief financial officer Mitesh Thakkar said today. He said the country traditionally imports mid-calorific value coal specifications from Indonesia, Russia and Mozambique.
Indian cement makers are still the largest industrial customers of Consol’s exports.
Meanwhile, domestic power generation accounted for less than 25pc of Consol’s recurring revenue last quarter.
Domestic power markets were “predictably underwhelming” last quarter since power plants still had elevated coal stockpiles, Thakkar said. But the company is seeing signs of potential improvement in US coal demand and prices.
Last quarter, Consol entered into a two-year deal with a domestic utility, said Bob Braithwaite, Consol’s senior vice president of marketing and sales. In addition, the company received confirmation today for additional business to deliver 1.6mn st to a US customer through 2027, he said. The average pricing for both the two-year deal and the new business is “north of $60/st.”
During the third quarter, Consol entered agreements to ship 5.4mn st of coal through 2025, mostly for export. With the additional commitments, Consol has 21.5mn st of coal from its Pennsylvania mining complex under contract for 2024 and 10.8mn st under contract for 2025, up from the previous sequential quarter’s 17.6mn st and 6.6mn st, respectively.
Consol tightened its full-year 2023 sales outlook range to 25.5mn-26.5mn st of coal from its Pennsylvania mines compared to 25mn-27mn st in July, but maintained its average realized price forecast at $76-80/st. The mines shipped 19.2mn st in the first nine months of 2023 and produced 19.5mn st, up from 17.9mn st each in the same period of 2022.
The Consol Marine terminal in Baltimore, Maryland, handled 4.3mn st of coal for export in the third quarter, including volumes from other coal producers. This is up from the 2.7mn st of coal handled during the same period in 2022. The terminal is on track to reach an annual throughput record, having handled 14.2mn st in January-September 2023.
Consol’s new Itmann metallurgical coal mining complex in West Virginia produced 91,000st of coal last quarter. In addition, the complex sold 123,000st of coal from Itmann and third-parties from July-September. For the year through September, Itmann produced 225,000st and sold 357,000st.
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- On November 9, 2023