Seeking Alpha

U.S. imports more coal even as Appalachian mines shut down

  • Coal imports to the U.S. surged 44% Y/Y to 5.4M metric tons during the first six months of 2014, even as coal mines close throughout central Appalachia.
  • The main reason is price: It costs $26/ton to ship coal from central Appalachia to power plants in Florida vs. $15/ton to get coal from a mine in Colombia.
  • Appalachian miners such as Alpha Natural Resources (NYSE:ANR) say imports from Colombia have added to their troubles; Colombia produces a high quality thermal coal, it's inexpensive to mine it, and relatively inexpensive to ship it to the U.S. east coast.
  • The cheaper imports benefit some utilities such as Southern Co. (NYSE:SO), which has 63 coal-fired power generating units in four states and bought 25% more imported coal than expected.
  • Low prices for international shipping also have helped Colombian coal, as the Baltic Dry Index has fallen to one-tenth of its level five years ago; U.S. rail rates have mostly held firm over the same period.
  • ETFs: KOL
Comments (26)
  • wigit5
    , contributor
    Comments (4133) | Send Message
     
    Slave labor is a hell of a drug
    14 Aug 2014, 07:00 PM Reply Like
  • Tueffelhund85
    , contributor
    Comments (189) | Send Message
     
    Wigit you are out of touch too. No clue about real world economics. It is all emotion and perception for the weak and inexperienced class
    14 Aug 2014, 11:31 PM Reply Like
  • wigit5
    , contributor
    Comments (4133) | Send Message
     
    Ignorance is bliss for you isn't it Devil....
    15 Aug 2014, 10:22 AM Reply Like
  • wigit5
    , contributor
    Comments (4133) | Send Message
     
    Not sure who reported my first comment but the guys name is Tueffelhund which is short for the german saying "Devil Dog" often associated with US Marines... It's not derogatory so stop reporting my comments.

     

    Seeking Alpha stop deleting my comments just because someone "reports abuse" use some brainpower and actually look to see if it is offensive.
    15 Aug 2014, 10:33 AM Reply Like
  • wigit5
    , contributor
    Comments (4133) | Send Message
     
    Tueffel your not shedding any good light on Marines by the way..... suggest a name change quickly.
    15 Aug 2014, 10:33 AM Reply Like
  • Tueffelhund85
    , contributor
    Comments (189) | Send Message
     
    Wigit,

     

    You are a joke. YOU HAVE NO CREDIBILITY. Get a real job, loser.
    16 Aug 2014, 10:22 PM Reply Like
  • Acetylator
    , contributor
    Comments (30) | Send Message
     
    Wigit, with all respect, but if you want to brag here with your knowledge of foreign languages, you should learn them first, or at least, check some damn dictionary. Tueffelhund means nothing. "Teufel" means Devil in German, not "Tueffel". "Tueffel" means "slipper", or, sometimes "potato" in some regions of Germany (I live there). See the difference? It's a SLIPPER, not DEVIL. Please stop bringing this sh*t to SA. We don't need it here.
    17 Aug 2014, 03:46 AM Reply Like
  • wigit5
    , contributor
    Comments (4133) | Send Message
     
    Acetylator... you are new here so I understand the misunderstanding. I didn't brag about knowing any particular language. For reference since you don't see to know what I'm talking about here is a link.

     

    http://bit.ly/1pUurnM

     

    Funny you live in Germany yet don't know it's history...
    17 Aug 2014, 11:23 AM Reply Like
  • Continental Kid
    , contributor
    Comments (214) | Send Message
     
    Way to go Obama...smash coal companies...lay off Americans ...to import what they were producing....only 2 years to go hope we make it
    14 Aug 2014, 07:03 PM Reply Like
  • blake303
    , contributor
    Comments (80) | Send Message
     
    You are confused. Obama doesn't set shipping rates or Colombian wages. If Appalachian mines could compete on price and quality, I'm sure Southern would have no problem using American coal. It's economics, not politics. Capitalism is a bitch when you're on the losing end.
    14 Aug 2014, 07:46 PM Reply Like
  • Hubert Biagi
    , contributor
    Comments (704) | Send Message
     
    Right, we export low quality coal to China to burn with much looser emission standards, and then must import high quality coal to burn in our backyard. Last time I checked, it was all the same atmosphere. But I suppose as long as it's not in your backyard, it's OK?
    14 Aug 2014, 08:10 PM Reply Like
  • blake303
    , contributor
    Comments (80) | Send Message
     
    Who said anything about the atmosphere? If it is cheaper to import coal to the US from Colombia than to ship it from WITHIN THE US, how could you possibly think it is cost effective to export coal from the US all of the way to China? Australia, Indonesia, South Africa and Russia account for nearly all (~96% in 2013) of China's thermal coal imports.
    14 Aug 2014, 08:25 PM Reply Like
  • Tueffelhund85
    , contributor
    Comments (189) | Send Message
     
    Blake,

     

    You attack American companies and individuals that take their money overseas for better tax rates, yet you say it's okay to import foreign coal because the economics are better. You are a troubled and angry soul. I am sure you are another leftist Obama supporter that hates America. Hypocrite! The costs isn't better, it's another attempt to kill American coal industry. You radicals would pay more for foreign coal to kill the industry here.
    14 Aug 2014, 08:33 PM Reply Like
  • 6151621
    , contributor
    Comments (1174) | Send Message
     
    @Hubert: This is true for CO2 emissions but less so for particulate matter.
    14 Aug 2014, 09:51 PM Reply Like
  • aretailguy
    , contributor
    Comments (1222) | Send Message
     
    In all fairness, Colombia does not have minimum wage laws, EPA or OSHA laws and whatever regulations Obama's red pen and phone have put in place. Obama promised that electricity rates needed to "necessarily skyrocket" and he has only a couple years left to achieve his goal. We are now seeing what "fundamental transformation" of America looks like. This is what America voted for and this is the way it is. For better or for worse.
    15 Aug 2014, 12:09 AM Reply Like
  • Jubal04
    , contributor
    Comments (163) | Send Message
     
    FYI, all of those mines in Colombia are union operations. The workers there probably have the highest standard of living in the country.
    15 Aug 2014, 09:23 AM Reply Like
  • Acetylator
    , contributor
    Comments (30) | Send Message
     
    Hubert, this is *exactly* how it works. We call something "green" if pollution from using/producing something is somewhere else, not on our territory.
    17 Aug 2014, 03:49 AM Reply Like
  • jobehro
    , contributor
    Comments (246) | Send Message
     
    How is economics effected by politics? Isn't the most efficient productions the choice of Buyers? We are competing with the world when it comes to trading goods. Political policies can cost jobs or protect jobs. Competition usually produces efficiencies when policies are supportive rather than anti-productive. The big picture requires all factors to be considered and policies initiated to protect the interests of society. Economics must support Society first and Polititians are loath to seem ignorant of that policy. Don't you all agree?
    14 Aug 2014, 08:46 PM Reply Like
  • Joe Mac the Wise
    , contributor
    Comment (1) | Send Message
     
    Obama has nothing to do with the price of shipping coal. Maybe EPA causes the price to go up for production, but not shipping.
    14 Aug 2014, 10:44 PM Reply Like
  • Retired and loving it
    , contributor
    Comments (326) | Send Message
     
    High energy costs are going to change the way people behave. If it costs $26 a tonne to move coal from Pennsylvania to Florida maybe we should stop doing that.
    14 Aug 2014, 11:32 PM Reply Like
  • wigit5
    , contributor
    Comments (4133) | Send Message
     
    It doesn't specify northern app or central app, but I think from PA to FL it's slightly more expensive... I've been out of the loop for a while now though on coal tranport pricing but several years back Northern appalachia (PA type places) was a little higher to ship south than say KY/WV for obvious reasons. That being said PA coal can get to Baltimore harbor fairly cheap.
    15 Aug 2014, 08:47 AM Reply Like
  • Jubal04
    , contributor
    Comments (163) | Send Message
     
    If you look at some of SO's recent purchases, you might see that they are moving some coal from Washington, PA to their plants. Delivered cost on a cents per MMBTU is all they look at. (even before quality) The Colombian coal mostly displaces Alabama coal.
    15 Aug 2014, 09:31 AM Reply Like
  • Investor Talkroom
    , contributor
    Comments (513) | Send Message
     
    No wonder about a year ago there were reports of GS private equity funds investing in coal mines and shipping terminals in Columbia.
    15 Aug 2014, 05:11 PM Reply Like
  • dvb
    , contributor
    Comment (1) | Send Message
     
    its Global Market.. fob price plus shipping is X delivered p ton. plus/minus for caloric value and that makes Coal from Y more interesting then from Z.

     

    Simply (end)price and quality driven...

     

    No politics needed, the coal imports are as old as.... Lincoln... ?
    15 Aug 2014, 05:52 PM Reply Like
  • Halfatuna@aol.com
    , contributor
    Comments (22) | Send Message
     
    The wind of corruption blows from one sector to another everyday internationally ,what's left is the market at 930am..my opinion..
    17 Aug 2014, 09:01 AM Reply Like
  • mudderfubber
    , contributor
    Comments (37) | Send Message
     
    The Environmental Protection Agency should definitely register as a communist party...
    18 Aug 2014, 08:13 AM Reply Like
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