Wed, January 11, 2017 5:46 am

Welcome to 2017! After a few days of much needed R&R, the team at DTC is back and ready to tackle the new year. We have been busy reading headlines, reaching out to contacts and reviewing our forecasts to bring you the best color available, and we even packaged it in this tidy carrying case. This is also the time of year we look at how we can change/improve this product and we certainly invite your feedback~ Team DTC

 

Major Takeaways:

  1. Supply/Demand Changes: Supply/Demand Changes: We are constantly adjusting our forecast based on the latest available data. This month we’ve made some downward revisions to 2016 production and raised future utility demand. We also revised our historical data to match the latest EIA data revisions.
  2. Restarts, New, and Increased Coking Coal Production: Since Jan ’14, we’ve only needed to keep a detailed record of coking coal cutbacks worldwide (registering 69.49 mm MT to date); However, the current seaborne coking coal rally has resulted in so many announcements of restarts, new, and increased production in the past few months that we’re now digging just as deep to track those as well to stay in the front of the pack and to give you that competitive edge.
  3. DTC EIA Revision Estimates: Big Drop in Coking Coal Prices: We’ve examined the market indicators and have lowered our FY17 coking coal price forecast in a big way. The recent rally hit its peak with the $285/MT benchmark settlement and is expected to fall rapidly.
  4. Restarts, New, and Increased Coking Coal Production: As the seaborne coking coal rally spurred many announcements of restarts, new, and increased production, we’ve been tracking these to stay in the front of the pack and to give you that competitive edge. Since 2014, the cutbacks have totaled 72.40 mm MT annualized.
  5. Oct Gen Data: Natgas is still outpacing coal, but the margin is shrinking. (natgas 32.8% vs coal 31.7% in Oct).
  6. Coal Gen Looking Up in December: The early data from the MISO and SPP markets shows coal generation up strongly YoY, thanks to colder weather and more favorable generation economics relative to natgas.
  7. Obama EPA Takes Parting Shot at Texas: After retracting a contentious Regional Haze plan for Texas in late November, the EPA has proposed a new one which creates an even more tangled regulatory web for the next administration to extricate itself from.


DTC On the Road:

DTC Kicks Off 2017 at Coaltrans USA: The coal conference circuit takes its typical annual hiatus this month, but Coaltrans USA kicks things off for the New Year with its 17th annual event on February 2nd and 3rd. Jack and Hans will be heading down to sunny Miami where Hans is also scheduled to present. If you happen to be one of the fortunate who has plans to enjoy historical highs of 74°, please find us and say hello!