The PRB continues to experience a prolonged declining domestic market. Demand dropped by 100 million tons from 2008 to 2015. With $2-$3 natural gas prices and record stockpiles, PRB production will drop another 70 mmt to ~320 mmt in 2016. Assuming gas prices reach $3 and stocks drop 50 million tons to around 60 million, PRB demand could increase by 40-60 million tons in 2017 and 2018 to around 380 million tons. Longer term and, assuming natural gas prices are higher than $3/mmBtu, our Base Case demand forecast indicates PRB demand could drop to below 300 million tons by 2036 as aging coal-fired power plants retire.
In 2013 we successfully predicted lower stockpiles, a tightening of the market and a $3-$4/ton price spike to occur in early 2014. However, rail transportation issues, a cool summer and low gas prices took the wind out of the early 2014 price spike. Spot prices have dropped to levels lower than experienced in 2012 and 2013. So, what's it going to take for prices to spike again? When will it happen?
We don't have all of the answers, but we do have many observations and predictions to share with our readers. Prepared as a multi-client consulting study, this investigation is the most comprehensive review available on the PRB and Bull Mountain coalfield's coal geology, reserves, quality, historic, current and future coal production, coal control/ownership, transportation infrastructure, strip ratios, mine productivity and production costs for all active and proposed mines. Also included in this study is a historical analysis of PRB price trends and our twenty year demand and price forecast for PRB coal.
With this report the reader can:
The 2017 report will be available in February 2017. In the interim purchasers of the 2017 report will receive the 2014 PRB report and the 2016 Executive Summary Update in pdf format.
Please call John Hanou at (410) 279-3818 or email at firstname.lastname@example.org if you have any questions.
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