PRB 8,400 coal production down but not out

The share of lower heat 8,400 Btu/lb coal produced in the Powder River Basin continues to decline but is unlikely to go away, say market sources. In 2008, production of PRB 8,400 coal came to slightly more than 218 million st, or 45% of the total PRB market. In 2015, however, PRB 8,400 production dropped to 114 million st, or just 29% of the basin’s output. “It all comes down to price at the end of the day, but it will probably go down further then it is now,” said a producer source. The reason is simple enough: lack of demand. But demand is cyclical, and 8,400 coal remains attractive for those utilities that are closest to the basin, given the lower transportation costs. In 2015, the three largest destinations for 8,400 coal were Texas, Nebraska and Kansas. “When you go shorter, [8,400 coal] comes in more competitive because the cost is much better on a [per] MMBtu basis,” said a market participant. For comparison, the three largest destinations for higher heat PRB 8,800 coal in 2015 were Illinois, Missouri and Texas. “If freight is identical, you want to stuff the most BTUs you can in that car,” said a

The post PRB 8,400 coal production down but not out appeared first on CTRM Center.

Source: CTRM Center

Related Posts

Leave a reply