08/05/25
US producer Core raises coal sales volume outlook
Houston, 8 May (Argus) — 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. By Anna
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