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The support of US President Donald Trump to the country's coal industry is indisputable. He vowed to "register" US coal miners in the election campaign and have not changed their attitude since entering the White House.
In July 2017, the President announced his intention to withdraw from the Paris climate agreement, signed by 195 countries in November 2015, or according to this view.
Some 12 months later, Trump came up with "clean affordable energy" rule that was transferring pollution control laws to individual states, which facilitated project approvals for coal-fired power plants and compliance with standards of emission more relaxed in theory. He has almost single-handedly attempted to revisit the climate change rules adopted under the Obama administration to honor the promises made to voters in mining states such as West Virginia, Montana and Wyoming.
A defender holds a sign while President Donald Trump speaks at a rally in Huntington, West Virginia, United States, in November 2018. (Photo: Tyler Evert / AP)
Yet, despite all this, more coal-fired power plants were shut down in Trump's first two years than in Barack Obama's first term, according to a US Energy Information Administration (EIA) rating. Reuters data.
The readings suggest that 23,400 MW of coal-fired generation in the United States was removed from the grid in 2017-18, compared to 14,900 MW in 2009-12. In fact, the EIA suggests that the number of coal-fired plants has continued to decline each year since coal production capacity reached just over 317,400 MW in 2011, and the agency does not expect no reversal.
While coal-fired power plants are slowing and domestic demand is weakening; exports – while increasing – are facing a global challenge in terms of carbon emissions. It is therefore not surprising that Moody is taking into account coal producers in the Powder River Basin (PRB) in the United States. largest coal-producing region, will continue to face weak trade prospects in 2019.
In addition, the rating agency says that there is no "clear solution in sight" for the plight of producers in the mammoth coal production basin that covers the east of the country. Wyoming and Montana.
"The PRB is the weakest coal basin today.The deterioration of the economy in the basin has led to a reduction in the production of some large producers, financial difficulties for producers with lower credit quality. and a very difficult market for low-temperature coals, "warns Benjamin Nelson, Moody's credit manager.
Despite Trump's rhetoric, the sector is experiencing a secular long-term decline, motivated by a combination of low-cost natural gas and a trend toward renewable energy production. & Nbsp; All of these factors have made low-sulfur, low-heat PRB coal less competitive while utilities continue to abandon coal-fired plants, Nelson said.
Export opportunities, offering short- and medium-term operational buy-back to US coal producers, also appear limited for PRB players compared to other basins due to logistical difficulties, including public opposition to exports coal from the West Coast.
Oregon, California and the state of Washington have all reduced their coal exports, leaving much of the routing of the PRB, to the extent possible, via the Port of Vancouver in Colombia -British. On the contrary, coal producers in the Appalachians and the Illinois Basin have been more successful in exporting coal.
& Nbsp; truck carrying coal & nbsp; in a mine near Decker, Montana, United States. (Photo: Matthew Brown / AP archives) & nbsp;
The business outlook and trajectories of Warrior Met Coal (NYSE: HCC), which supplies coal to European blast furnaces from its two mines in Alabama, is a typical example. and Cloud Peak Energy (NYSE: CLD), which is firmly rooted in the operation of PRB.
The way the two are doing commercially could not be more different. While the first managed to offer dividends to shareholders, with an annual rise in its share price of 36% (from April 16, 2018), the second removed its listing from the NYSE to trade on the OTC Pink market as a result of a decline of 98% in the price of his stock and fears of bankruptcy.
This is the kind of financial problem that Peabody Energy and Arch Coal, two companies in Cloud Peak Energy's PRB, are familiar with. However, Moody's is not planning for short-term consolidation of PRB producers, suggesting that economic data from the region will not improve in a sustainable manner. And while major producers in the basin, including Peabody Energy and Arch Coal, are cutting production, the industry remains fragmented and some small producers continue to increase production.
Trump beat Hillary Clinton in Wyoming (with 67% of votes), Montana (56.2%) and West Virginia (68.50%). In fact, in West Virginia, Clinton's 42.2 percent margin of victory is the largest of any presidential candidate for either party in the state's history, surpbading the victory margin of 36.4% of Abraham Lincoln in 1864.
Most of these three US states voted on the president's promise to save their coal industry, but macroeconomic scenarios remain difficult, especially for the Montana and Wyoming mines. Perhaps, even the president knows, to promise is easy; changing the dynamics of the market is clearly not.
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The support of US President Donald Trump to the country's coal industry is indisputable. He has promised to "save" American coal miners during the presidential campaign and has hardly diminished his position since entering the White House.
In July 2017, the President announced his intention to withdraw from the Paris climate agreement, signed by 195 countries in November 2015, or according to this view.
Some 12 months later, Trump's "affordable clean energy" rule transferring pollution control laws to individual states facilitated the approval of coal-fired power projects and made the theory of emission standards more flexible. He has almost single-handedly attempted to revisit the climate change rules adopted under the Obama administration to honor the promises made to voters in mining states such as West Virginia, Montana and Wyoming.
A defender holds a sign while President Donald Trump speaks at a rally in Huntington, West Virginia, United States, in November 2018. (Photo: Tyler Evert / AP)
Yet, despite all this, more coal-fired power plants were shut down during Trump's first two years than Barack Obama's first term, according to a compilation by the US Energy Information Administration (EIA) and Reuters data.
The readings suggest that 23,400 MW of coal-fired generation in the United States was removed from the grid in 2017-18, compared to 14,900 MW in 2009-12. In fact, the EIA suggests that the number of coal-fired plants has continued to decline each year since coal production capacity reached just over 317,400 MW in 2011, and the agency does not expect no reversal.
While coal-fired power plants are slowing and domestic demand is weakening; exports – while increasing – are facing a global challenge in terms of carbon emissions. It is therefore not surprising that Moody is taking into account coal producers in the Powder River Basin (PRB) in the United States. largest coal-producing region, will continue to face weak trade prospects in 2019.
In addition, the rating agency claims that there is no "clear solution in sight" for the problem of producers of the mammoth coal production basin that covers the east. Wyoming and Montana.
"The PRB is the weakest coal basin currently, and the deterioration of the commercial situation in the basin has led to a reduction in the production of some large producers, financial stress for producers with lower credit quality and a very competitive market. difficult for low-heat coals, "warns Benjamin Nelson Senior Credit Officer at Moody's.
Despite Trump's rhetoric, the sector is experiencing a secular long-term decline, motivated by a combination of low-cost natural gas and a trend toward renewable energy production. All of these factors have made PRB coal less competitive as utilities continue to decommission coal-fired plants, Nelson said.
Export opportunities, offering short- and medium-term operational buy-back to US coal producers, also appear limited for PRB players compared to other basins due to logistical difficulties, including public opposition to exports coal from the West Coast.
Oregon, California and the state of Washington have all reduced their coal exports, leaving much of the routing of the PRB, to the extent possible, via the Port of Vancouver in Colombia -British. On the contrary, coal producers in the Appalachians and the Illinois Basin have been more successful in exporting coal.
A truck carrying coal at a mine near Decker, Montana, United States. (Photo: Matthew Brown / AP archives)
The business outlook and trajectories of Warrior Met Coal (NYSE: HCC), which supplies coal to European blast furnaces from its two mines in Alabama, is a typical example. and Cloud Peak Energy (NYSE: CLD), which is firmly rooted in the operation of PRB.
The way the two are doing commercially could not be more different. While the former managed to deliver dividends to shareholders, with an annual rise in its share price of 36% (from April 16, 2018), the second removed its listing from the NYSE to trade on the pink market. Fall of 98% of the price of his action and fears of bankruptcy.
This is the kind of financial problem that Peabody Energy and Arch Coal, two companies in Cloud Peak Energy's PRB, are familiar with. However, Moody's is not planning for short-term consolidation of PRB producers, suggesting that economic data from the region will not improve in a sustainable manner. And while major producers in the basin, including Peabody Energy and Arch Coal, are cutting production, the industry remains fragmented and some small producers continue to increase production.
Trump beat Hillary Clinton in Wyoming (with 67% of votes), Montana (56.2%) and West Virginia (68.50%). In fact, in West Virginia, Clinton's 42.2 percent margin of victory is the largest of any presidential candidate for either party in the state's history.
Most of these three US states voted on the president's promise to save their coal industry, but macroeconomic scenarios remain difficult, especially for the Montana and Wyoming mines. Perhaps, even the president knows, to promise is easy; changing the dynamics of the market is clearly not.
