Wed, May 10, 2017 8:51 am
April was another very busy month for the gang at DTC. Cyclone Debbie took the spotlight early and kept us on our toes tracking the ripple effects as they spread out across the markets. MSHA production was next to catch our attention as we learned how the domestic players fared in Q1, followed by a quick blast of earnings from all across the space. Thank you for your continued support of our efforts- it is our pleasure to be able to bring you our best every day, week, month and year! ~Team DTC
• Supply/Demand Changes: This month we made changes to our supply forecasts for each producing region in the US, reflecting our views on netbacks from international trade, competition vs renewables and natural gas, coking coal prices, stockpiles at utilities and weather-related disruptions. Turn to pages 9 – 11 to see where we raised/lowered our production outlook, as well as changes to our coking coal exports estimate and coal demand from the electric power sector.
• Coking Coal Benchmark Forecast: Following the remnants of Cyclone Debbie, the market is anxiously awaiting some indication for a benchmark settlement, but Japan is in the midst of ‘Golden Week’ – a time of multiple holidays and vacations. An agreement likely won’t be reached until mid-May. We have provided some commentary around our benchmark forecasts, explaining why we are leaving them unchanged this month. See page 106 for more.
• Coal Hangs on Another Month: For the third consecutive month, coal’s share (30.26%) of the generation mix surpassed that of gas (27.25%); however, the streak may be short lived in the shoulder season as gas-weighted heating degree days were 5.4% below normal in March. Our complete coverage of US generation and inventory data begins on page 36.
• Western Utilities Shedding Coal: A number of utilities in the western US have filed integrated resource plans with state regulators in the past month, and all of them project a continued march away from coal regardless of actions by the administration to reverse that trend. Cheap natgas and environmental regs are not the only culprits. Utility news is on page 25.
• EPA Starts Regulatory Revamp: The courts have proven acquiescent to the EPA’s desire to take several regulatory actions by the prior administration back to the drawing board. Regulatory news is on page 115.
• Q1 Earnings- What we are learning: Over the last couple of weeks, we have checked in with domestic and global producers, the railroads, the steel producers and even CAT. The consensus is cautious optimism that the winds of change are blowing in favor of a recovery. You can find global coverage on page 66, domestic comments on page 120 and notes from the railroads on page 59.
• Where to Find the Cool Kids: This week you’ll find Hans and Phil in Orlando attending the Eastern Fuel Buyers Conference, while on page 148 you’ll find details on upcoming industry conferences and events. Later this month, Hans will be traveling to St. Louis to speak about trends in the dry cargo market at the fourth annual Inland Marine Expo.