Tue, December 4, 2018 1:15 pm

We blinked and another whole year has passed! As we reflect back over all the happenings, we note it feels a bit like the “choose your own adventure” novels with all the different directions the markets took this year. We are pretty excited to have everyone in NYC this week to help get some color around how the final chapter of 2018 will end. In the meantime, we invite you to pour a cup of cheer and peruse this month’s offering. From whatever corner of the world you find yourself and in whatever form your holidays take, we wish you the best and thank you deeply for your support of DTC. May 2019 bring you good fortune. ~Team DTC

  • DTC Supply & Demand Forecast: With the end of the year approaching, there were very few changes to be made this month. However, we adjusted our expectation for 2018 utility burn upwards by 6 mm tons based on an early start to winter weather and high natgas prices. Although we’ve revised our forecast upward, our 2018 forecast represents an approx. 31 mm ton drop in demand from last year. In addition, we tweaked our forecasts for Ill Basin and Napp production this year. You’ll find the latest expectations on page 8.
  • Estimates Issued for Q3 EIA Revisions: We anticipate the EIA will issue its Q3 production revisions late in December to match reported MSHA data. Based on our research, we anticipate total US production will see a downward revision of 1.25 mm tons. A regional breakout of revisions is located on page 11.
  • API2 Weakness in Focus: The API 2 saw notable instability in November, hindered by ARA stockpiles in the short-term as well as weakness in broader European energy prices. The API 2 prompt month price hit a low of $82.20/MT, falling below the $90 mark for the first time since early May. Additionally, low water levels on the Rhine have driven EMO stocks to a nearly eight-year high following severe heatwave and drier-than-normal conditions. See our coverage of this issue and various other drivers in the seaborne thermal coal market starting of page 56.
  • Queensland Exports Face Heavy November Maintenance: Exports from Australia’s most prolific producing state reached 19.3 mm MT in October, the highest monthly tonnage YTD, with total tonnage for the first 10 months of year at almost 178.9 mm MT, which annualized would exceed the 2016 record of 214.3 mm MT. However, turn to page 67 for details of the planned maintenance for the month that will likely preclude 2018 from setting a new record.   
  • Global Thermal and Coking Forecasts: Global economic indicators are impacting supply/demand drivers in major demand countries, especially India and China. While we are maintaining both our previous thermal and met forecasts, there is a lot more at play. Starting on page 65 for thermal and page 78 for met, you’ll find our comprehensive market commentary.
  • Final Q3 Earnings Results: November saw the remaining companies release their Q3 earnings to include results from CTRA, CSO.V, FELP, HNRG, METC, NRP, and RHNO, with Contura Energy completing its merger with Alpha Natural Resources Holdings and Ramaco Resources experiencing an outage at its Elk Creek complex. Head to page 87 for more equity-related coverage and to see the most recent institutional investor changes by company.
  • Light Travel to Close Out the Year: DTC’s Charles Dayton, VP of Market Analytics, spoke today at the American Coal Council’s Coal Trading Conference in NYC. The rest of the year looks light on travel, but we will pick back up in the new year. For a full list of industry events, please turn to page 124.
  • Coal Unit Retirements: This month, we made only one adjustment to our coal unit retirement database, adding Entergy Arkansas’ agreement to close the 1,800 MW White Bluff coal plant by 2028 and the 1,800 MW Independence coal plant by 2030 (along with the Lake Catherine natural gas plant by 2027). You’ll find the full list starting on page 22.

Clients can access the report in the subscriber area. For more information on how to access the Monthly Update or to sign up for a free, month-long trial, please contact Ben Coleman (Bcoleman@doyletradingconsultants.com, +1.646.957.8894).