US coal producer Core Natural Resources plans to sell more coal in 2025 than previously anticipated, with stronger domestic utility demand expected to offset challenging seaborne market conditions and some production setbacks.
Core projected on Thursday that it will ship around 75.5mn-81mn st (68.5mn-73.5mn metric tonnes) of thermal and metallurgical coal this year, up from its February forecast of 72.5mn-79mn st.
The new expectations for this year still are lower than the combined 85mn st sold in 2024 by Arch Resources and Consol Energy before the two companies merged in January to form Core.
On the thermal side, Core has 75.6mn st of coal under contract to ship this year, including 26.5mn st of high calorific-value (CV) thermal coal, 41.9mn st of Powder River basin (PRB) coal and 7.2mn st of metallurgical coal.
While the global trade environment is "uncertain", there are domestic opportunities because of continued US electricity load growth, chief executive Paul Lang said on Core's first-quarter earnings call.
Overall US electricity generation was 3pc higher in 2024 than in 2023. And in the first four months of this year, generation was 3.9pc higher than in January-April 2024 as coal-fired generation climbed by around 20pc, more than offsetting a "small" decline in natural gas power, Lang said.
Colder-than-normal weather during the first quarter resulted in surging natural gas prices and higher power prices in the PJM Interconnection, causing generators to dispatch more coal power than expected and trimming inventories.
Utilities are in the market earlier this year than they had been recently, seeking both spot and term coal volumes, Core senior vice president Robert Braithwaite said.
"We actually have a couple [requests for proposals] out today," Braithwaite said. One solicitation is for deliveries through 2030 and one is for deliveries through 2028, he said, without naming the prospective buyers.
Core also expects a number of international headwinds to be short-lived. While there has been "a bit of a price wall" for potential high-sulfur thermal coal business to India because of recent drops in petroleum coke prices, "we would expect that to pick back up in the coming months", Braithwaite said. In addition, if there is a trade deal between China and the US, China may resume buying US thermal coal and petroleum coke, he said. This would tighten the supply of coal and petroleum coke going into the Indian market and support higher fuel prices, according to Braithwaite.
And although seaborne metallurgical coal markets remained muted during the first quarter, growing blast furnace capacity in southeast Asia is anticipated to strengthen export demand for US coking coal, Lang said.
Last quarter, the company sold 2.31mn st of metallurgical coal. Record quarterly production at Core's metallurgical coal-producing Leer mine in West Virginia limited the impact of a longwall outage at Leer South, which was sealed in January to extinguish a fire.
Core said it resumed continuous miner operations at Leer South in February and expects to restart longwall production by the middle of this year.
In addition, there were three longwall moves at the producer's Pennsylvania mining complex during the quarter. Lang noted that there is a fourth longwall move currently in progress at the complex, and the fifth and final planned move for 2025 will occur in the back half of the year.
Core's total coal sales during the first quarter fell to 20.1mn st of thermal and metallurgical, down from 21.3mn shipped by Consol and Arch combined a year earlier.
Core sold 7.1mn st of high CV thermal coal at an average price of $63.18/st last quarter, and 10.7mn st of PRB coal priced at an average of $14.93/st. In the first quarter of 2024, Consol's Pennsylvania mining complex sold 6.1mn st of high CV coal and Arch shipped 12.8mn st out of the PRB and from its high-CV West Elk mine in Colorado.
