Coal spot prices hold steady, but remain low
- The old Wall Street adage of sell in May and go away has applied to the coal industry for some time, but of late pricing has been in a rut.
All coal prices remained unchanged from the week ending May 13, according to the U.S. Energy Information Administration.
For the third consecutive week spot prices of Central Appalachian coal remained at $40.50 a short ton, down from $42.30 the week ending April 22.
That translates into $1.62 per million British Thermal Units, mmbtu, for Central Appalachian coal, which is mined in West Virginia.
Northern Appalachian coal was unchanged last week when spot commodity spot prices held at $43.55 a short ton. The week ending April 22, spot prices for Northern Appalachian coal were $46.60 a short ton, the EIA reported Last week, Northern Appalachian was trading for $1.68 mmbtu.
Analysts said prices will remain low for another year so. It's a case of supply and demand -- too much supply and not enough demand, they said.
Coal's demand has dived in the last few years, as environmental regulations, cheaper natural gas, losing domestic and international customers during a global supply glut combined. The U.S.'s top coal producers are in bankruptcy, along with scores of smaller companies.
The correlation between prices and production is staggering: in 2015, production fell 18 percent to 897 million tons, while usage by the power section plummeted 21 percent, according to the EIA.
Employment fell 29 percent in recent years. Statewide, the numbers are just as worrisome. In March 2016, 83 operating mines in West Virginia employed slightly more than 11,500 people. In December 2015, there were 97 operating mines with nearly 15,200 employees, according to the West Virginia Office of Miners' Health Safety and Training.
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