price trend of coal

price trend of coal

PostBy: gambler On: Thu Feb 01, 2007 12:02 am

What has the trend been for the last five years for the price of a ton of anthracite coal? Has it gone up drastically or has it stayed about the same as the rate of inflation
gambler
 
Stove/Furnace Make: Leisure Line
Stove/Furnace Model: Pioneer

PostBy: Richard S. On: Thu Feb 01, 2007 1:25 am

Looking over some old records it was $90 dollars in in 1996, the same delivery today is going to be about $130. The inflation calculator tells me that $90 in 1997 is worth $113 today....

However there are a few things to consider:

1. 10 years ago anthracite had no where near the demand it does now so it has more value on the market. Looking back another 10 years in my records to 1987 the same delivery was $80, as you can see prices were quite stagnant. The calculator tells me $80 is worth $142 today. Taking that into account the price of coal delivered is below the inflation rate using a 20 year time span.

2. The cost of energy has increased significantly across the board no matter what the fuel source is in the past few years. This has a double affect on coal. As I've mentioned before diesel and electricity is a major expense in the production of coal, the machines at the mines, the trucks moving it from the mines, the machinery at the breaker moving it around and finally the trucks moving it to it's final destination such as myself. The same gallon of diesel is costing me about double what it did in 97. Almost triple if you want to consider those few months where it dipped to a dollar that one year. ...and yes I kow gas prices have dipped but diesel has increased. Diesel used to be about the same price as regular unleaded, it's now the same or higher than super.

3. Lastly with the exception of the small spike after Katrina, emphasis on the word small, coal prices have steadily increased. These aren't wild fluctuations but small incremental increases. That same delivery today is about $2 more than it was last year.
Richard S.
 
Stoker Coal Boiler: Van Wert VA1200
Coal Size/Type: Buckwheat/Anthracite

PostBy: sparky On: Thu Feb 01, 2007 11:09 pm

Good question. Great answer. That's why I like this forum.
sparky
 
Stove/Furnace Make: Harman
Stove/Furnace Model: SF2500 Handfired furnace


PostBy: tewplanman On: Thu Feb 01, 2007 11:33 pm

As a dealer it your answer is quite logical you take a cost approach. Its also one that I can appreciate being a cost accountant. However Im also a trader. I trade oil, gas, stocks bonds, as well as physical goods like building products from china.

I would suggest that the supply demand cure is a better determinant of price than the traditional cost plus method used by a manufacturer.

To be honest Im worried, that at the cost per btu of other fuels rise, the cost of anthracite will follow. This is the primary reason i purchased a hand fired stove flexibility.

Does anyone know if there is a forward or contract market for anthracite. I would also love to know how to measure the suppyly and demand for the product. Anyone know of a good site for proven reserves as well as determinats of demand

Tom in PA
US Stove 1600G
tewplanman
 

PostBy: gambler On: Fri Feb 02, 2007 12:00 am

Good point tewplanman!!
gambler
 
Stove/Furnace Make: Leisure Line
Stove/Furnace Model: Pioneer

PostBy: Richard S. On: Fri Feb 02, 2007 9:10 am

tewplanman wrote:I would also love to know how to measure the suppyly and demand for the product. Anyone know of a good site for proven reserves as well as determinats of demand


I'm no expert on the matter but I can tell you what I know. To answer your question really depends on specifically what you are referring too. If by proven reserves you mean overall the US has the most abundant supply of coal on the planet with over 25% of the world's proven reserves, I've seen a whole lot of conflicting information but most supports the US being able to power itself with coal for over a century.

Anthracite reserves are quite abundant by themselves but the tons being mined is not a whole lot. Add to that the facilities to process it are not that great a number you have a low supply, just like gas it wouldn't matter how much of a raw supply you have because you don't have any way of making more for the end consumer at the moment.

As for a real world example 5 to 6 years ago the breaker where I get my coal had massive stock piles, these are non-existent today.

To be honest Im worried, that at the cost per btu of other fuels rise, the cost of anthracite will follow. This is the primary reason i purchased a hand fired stove flexibility.


That may be true however you will not see coal rise to the prices of other fuels, the market would not bear those prices. Why go through the trouble of using coal if you could flip a switch for the same cost?
Richard S.
 
Stoker Coal Boiler: Van Wert VA1200
Coal Size/Type: Buckwheat/Anthracite

PostBy: Yanche On: Fri Feb 02, 2007 12:21 pm

Residential coal using is a fraction of a percent of total US coal production. The following is taken data from the Annual Coal Report 2005, published October 2006, Energy Information Administration document DOE/EIA-0584 (2005).

Coal Consumption by use (per thousand short tons):
Electric Power 1,037,485
Industrial 60,3040
Coke 23,434
Residential 4,217

Doing the math I get 1,121,259 thousands of tons coal consumption. Residential heating is 4,217 divided by 1,121,259 = 0.4%

Now this is total consumption anthracite plus bituminous. Anthracite is a small fraction of the bituminous consumption.

From the Penn. Mining Production report 2004, the latest available Anthracite production was (tons):

Underground Mines 271,029
Surface Mines 2,056,003

Total Anthracite production 2,327,032 tons

I can't put my hands on the data source right now but of the total annual Anthracite production less than 0.1% is used for residential heating.

Anthracite coal production peaked in 1917 at 100,445,299 tons. It's been going down hill ever since. As our leader says:

NEPAForum Admin wrote:That may be true however you will not see coal rise to the prices of other fuels, the market would not bear those prices. Why go through the trouble of using coal if you could flip a switch for the same cost?


Yanche
Yanche
 
Stoker Coal Boiler: Alternate Heating Systems S-130
Coal Size/Type: Anthracite Pea

PostBy: tewplanman On: Fri Feb 02, 2007 6:30 pm

Interesting facts guys but I just get the feeling that this is too good a thing to last. All markets eventually adjust. I do know that the whole corn thing falls apart above $5.00 per bushel. Ethenol is just not the answer. The germans ran their army on coal derived petrol, but no one seems to be bringing it up in the news. Arch coal is down to a low, bit coal prices are plunging while oil hits $59.00 today on the close. And god forbid you talk about putting up a nuk plant in the US. Doesn't matter that the French, half of Europe and the chinese are going to build dozens in the next 5 years. The nuts in this country wont have anything to do with it. See Al Gore on TV today-- out of his mind :roll:

Im just wondering how long before we really get serious and start talking about viable alternatives like clean coal and petrol made from coal. Maybe our friendly administrator can tell us about an anthracite mine for sale in NE PA Buying OIH, USO, PTR, and YZC

Tom
tewplanman