Coal producer Peabody Energy boosted its outlook for 2025 Powder River basin (PRB) coal sales to be higher year-prior shipments, citing gains in coal-fired generation earlier this year and the shift in US policies and legislation.
The company Thursday projected 2025 PRB shipments would rise to 80mn-84mn short tons (72.6mn-76.2mn metric tonnes) from 79.6mn st last year. Peabody previously expected PRB coal sales this year would be in the range of 76mn-78mn st.
"We have seen a great first half of the year, with coal fuel generation up a whopping 15pc over the first-half of 2024," Peabody chief executive officer Jim Grech said.
Grech also credited recent legislation, including the royalty rate reduction that was folded into the One Big Beautiful Bill Act signed into law by President Donald Trump, as supporting coal operations and sales. The rate provision, which reduces royalties for surface mining on federal land to 7pc from 12.5pc, should improve PRB cost competitiveness going forward, Grech said. Peabody anticipates $15mn-$20mn in net benefits from the royalty changes in the second half of 2025, and benefits could be closer to $60mn in 2026.
"We expect that to help overall [contracted] volumes," said Peabody Energy chief financial officer Mark Spurbeck. He estimated the company has about two-thirds of its 2026 volumes under contract and "maybe" half of 2027 shipments.
The company has 83mn st of PRB coal priced and under contract to ship in 2025, up from 77mn st reported previously. This PRB coal is priced at an average of $13.65/st.
In the third quarter, company PRB shipments should be around 23mn st, compared with 22.1mn st a year earlier.
PRB coal sales were 20mn st in the second quarter, which was 26.6pc higher than a year earlier and slightly above the 19mn st the company had expected.
Peabody's other US thermal coal sales fell to 2.9mn st at an average price of $54.08/st in the second quarter from 3.7mn st and $55.21/st a year earlier. The company's non-PRB US thermal coal shipments also were lower than the 3.3mn st Peabody had expected in May for last quarter.
Peabody encountered adverse geological conditions at its Twentymile mine in Colorado last quarter as well as rail issues at its Bear Run underground mine in Indiana. The company expects improved rail performance at Bear Run and "significantly improved" performance at Twentymile after an August longwall move to a new panel is completed.
Peabody kept 2025 sales projections for its other US thermal coal mines at 13.4mn-14.4mn st, unchanged from February and May estimates.
In the third quarter, Peabody's other US thermal coal sales are expected to total 3.7mn st at an average price of $51.10/st. That compares with 4mn st and $53.52/st in the same period last year.
The company raised the low end of its outlook for its Australian thermal coal sales. The target range is now 14.6mn-15.2mn st instead of the 14.2mn-15.2mn st projected in May.
Peabody kept its metallurgical coal sales outlook unchanged at 8mn-9mn st.
The producer accelerated the planned start of longwall production at Centurion mine in Australia to February 2026. Peabody plans to start installing longwall shields at the mine in November.
In the second quarter, the company sold 3.6mn st of Australian thermal coal and 2.2mn st of coking coal, compared with 4.1mn st and 2mn st a year earlier.
