Optimism is growing in Central Appalachia that action in the thermal spot coal market could pick up soon.
With still-elevated but shrinking stockpiles, utilities continue to look into the spot market for possible deals ahead in the fourth quarter, market sources said this week.
Platts on Friday assessed CSX-quality coal (12,500 Btu/lb, 1.6 lbs SO2/MMBtu) at $44.25/st FOB rail for Q4 delivery, unchanged from last week.
One fuel buyer said the recent increase in coal burn has unlocked buying opportunities for later in the year, especially if there is a hot summer.
"We're burning some more coal, everybody's burning coal," the buyer said. "We didn't think that we'd be looking at the spot market this year, but now we may have some minor openings for later in the year. The fourth quarter is looking like it could be when people are looking for deliveries."
For the second straight week, US power plants set a new year-high mark in coal consumption. Data from S&P Global Platts unit Bentek Energy shows coal burn this week reached nearly 18.1 million st, up from about 17.8 million st the previous week.
That consumption dropped utility coal stockpiles 7 million st from last week, bringing nationwide levels to 165.5 million st and within 1.2% of year-ago inventories.
With hopes set on making Q4 deals soon, CAPP producers and brokers this week reported very little prompt-month or Q3 interest. Sources did hear a one-train deal for CSX-quality coal scheduled for July delivery at $40/st, but no other transactions were reported.
"There's more hope out there," one producer said. "We're coming up from the bottom of the market, hot weather is here and gas prices keep going up. All the signs are there that we'll start to see some deals."
