US thermal coal stocks surged in November to more than 180 million st as total coal burn dropped below 50 million st and all major regions across the US saw stockpiles and days of burn grow, a KBR analyst said Wednesday.
Coal shipments, while declining month-over-month by 5 million st, remained 12 million st above burn, "propelling the surge in stocks," New York City-based KBR analyst Lucas Pipes said in a research note.
Days of burn also increased to the mid-80s from about 80 days in October. By comparison, days of burn were about 60 days in November 2014, Pipes said. "With lower gas prices in December and a depressed forward strip into 2016, we anticipate that stockpiles will continue to grow into the New Year, maintaining high pressure on US thermal coal pricing," Pipes said.
The Powder River Basin had the largest drop in coal burn during the month, declining approximately 21% year over year. While shipments declined by 4 million st to 31 million st, stocks had a sharp net increase, Pipes said, and days of burn grew into the mid-90s from the mid-80s in October.
Coal burn in the Illinois Basin declined "marginally" from October as shipments declined by about 1 million st, which was not enough to decrease stockpiles.
Days of burn in the IB grew into the low-90s days from the high-80s days in October, Pipes said.
Northern Appalachia burn increased slightly month over month, but like the IB, a slight decline in shipments was not enough to overcome slow burn rates.
Days of burn in the IB grew into the low-90s days from the high 80s days in October, Pipes said.
In Central Appalachia, burn remained low and shipments "nearly equally restrained."
Stocks remained about 13 million st in the region while days of burn increased to break 100 days.
