How volatile are coal prices?

[Massacure]

I calculated that W. Virginia mines 14.7% of this nations coal. The data I used is here:
http://www.eia.doe.gov/cneaf/coal/cia/html/t1p01p1.html

My question is, now that the governer of W. Virginia ordered all mines closed, how are the prices going to be effected?

[Dead_Parrot]

1. They probably won't be...

I remember whan Maggie effectively killed the UK coal mines: It's now nearly all shipped in from the likes of China. The saving on wages & safety offsets the cost of transportation.

A few people die every week, but they're not British so no-one cares.

[amandabeech]

5. Almost all coal used in the U.S. is mined in the U.S.

The U.S. has the largest deposits of coal in the world, most of it bituminous or sub-bituminous. It is strip mined in West and in the East and is underground mined in the East and Ohio River Valley.

China is not doing a lot of coal exporting these days because they're burning it as fast as they can mine it in very dangerous mines.

Australia exports more coal than other countries, I believe.

[GrpCaptMandrake]

2. 1. Shut down is super-short term

2. Existing stockpiles will last more than a few days.

3. Shut down is voluntary.

4. Doubt it will affect Mountain Range Removal operations.




Live, liberal talk from the Heart of the Mountain State

[punpirate]

3. As I recall from plenty of years ago...

... the volatility is not as great as oil. The most sudden effect will be on those end consumers that have contracts with WV mines, and even those (in the case of power plants and large industrial consumers) generally have 30-60 day supplies on hand, which might be enough time to arrange for alternate sources of supply, albeit at higher costs. Contrast this with gasoline, which is based on in-the-pipeline feedstocks a few days deep these days.

It also depends upon whether or not the coal in WV is of a critical kind. I would guess that most of it is a lot like western PA sub-bituminous and has lots of fuel value, but plenty of ash. If any of it is in the metallurgical coal class, the closure could cause some problems for steelmakers relatively soon, since there are diminishing sources for that.

[amandabeech]

6. Ordinarily you would be right.

However, shipments of western coal have been held up by serious problems with the rail lines coming out of Wyoming. Heavy rain, regular dust and coal dust basically inundated some of the tracks last spring. I believe that there was another problem near the Kansas City rail hub, as well.

Stocks are relatively low at many electrical generating plants due to the rail disruptions, and many plants have been scrambling around for reserves now for several months. Add to that the fact that some natural gas generators are not operating due to high natgas prices and that most new plants coming on line these days will burn coal, and you could have a dicey situation in some places if the shut-down should go on for more than a few days.

[punpirate]

7. How current an effect do those disruptions...

... have now? For practical purposes, we're talking very nearly a year later now. I have been reading that rail now is generally in a bigger mess than it was in the late `80s, but those temporary disruptions in Wyoming must have been corrected at some time during last summer and fall. Are the rail lines not able to make up the cumulative difference in shipments to date? Wyoming is a factor, but are local rail and mines in PA, Ohio and Kentucky not able to make up the regional difference over time? Yeah, sulfur content counts, I know, but Wyoming isn't the only coal-producing area in the country.

Cheers.

[amandabeech]

8. Here's a recent release from the EIA that will answer most of your

questions:

http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html

In short, there are lingering problems from the rail situation that wasn't resolved until the fall. Substitution of higher sulfur eastern coal for western coal can be difficult for both regulatory and technical reasons.

There's lots of info about coal. Enjoy.

[punpirate]

9. Hmmm...

... looks like some critical materials shortages play into that. Big tires?! No real relief for another year? Whew.

[madrchsod]

4. if there is a disruption in the

shipping of coal either by barge or rail yes but otherwise no. there`s more coal in this country than saudi oil