Tennessee-based coal producer Contura Energy is facing export headwinds into some of its key markets.
On its fourth quarter 2018 earnings call Contura, which is the largest US metallurgical coal producer, said while it shipped 750,000st of metallurgical coal to Turkey in 2018 out of 11.1st of total met coal sales, a mid-2018 increase in Turkish coal tariffs on US coal imports from 5pc to 13.7pc have impacted Contura's sales into the country. Turkey increased tariffs in retaliation for US tariffs on Turkish goods, including steel products.
In its earnings released 1 April, Contura said it shipped 5.51mn st of coal in the fourth quarter, up 60pc from 3.44mn st shipped in the same period of the previous year. Sales from Contura's Central Appalachian metallurgical coal segment more than doubled to 2.07mn st at an average price of $119.37/st in the fourth quarter compared with 827,000st and $109.09/st in the same period of 2017.
For full-year 2018, Contura shipped 17.6mn st, up 12pc from 15.7mn st a year earlier. Most of the yearly increase can be attributed to Contura's Central Appalachian region, where coking coal sales rose to just under 5.2mn st from 3.9mn st.
Contura said shipments at the start of 2019 came in below expectations and that the company is expecting to ship its first cargo to Turkey in the second quarter. Contura said the tariffs challenged the competitiveness of its met coal compared to exports to Turkey from Australia, Colombia and Russia.
The company says it has also faced strong competition in Brazil, another key market, in the first quarter of the year.
Weather also is expected to impact Contura's first quarter results, with the company expecting to ship 300,000st less than it expected, though it did not elaborate on what it expected first quarter shipments to be.
