CONSOL makes metallurgical coal deal during strong 2Q
Metallurgical coal is a key element in steelmaking, and CONSOL Coal Resources LP is acquiring more of it.
In its second-quarter report, Southpointe-based CCR announced Thursday it had made its first “multi-shipment deal” for domestic metallurgical coal since 2013. That type of coal is more in demand now because of an uptick in the metals industry.
Another factor, according to the report, is sulfur levels “have begun to decline” in the Pennsylvania Mining Complex, located in Washington and Greene counties.
CONSOL said in a statement: “The lower sulfur, coupled with high fluidity and low cost, makes our product a better fit in the domestic metallurgical market and improves its competitiveness in the international crossover metallurgical markets as well.
“In the long term, we believe that this domestic market development will allow us to maximize our revenue potential and expand into the domestic metallurgical coal market.”
CCR said the deal “was a coal supply contract with a domestic coke producer,” but added little else on that matter.
Jimmy Brock, the company’s chief executive officer, said the Pennsylvania Mining Complex set a production record during the quarter. The complex is at least 35 years old.
“Strong domestic and international demand for our product, coupled with outstanding performance at the (PAMC), allowed us to deliver a record sales and production quarter,” he said.
“This is shaping up to be a record year for CCR … Record production and cost performance drove the solid second-quarter results. Our second-quarter sales volume of 2 million tons represented an annual run rate of more than 7.1 million tons for CCR, the highest in the history of the PAMC.”
CCR reported second-quarter earnings of $19 million, a net income of 69 cents per share. It posted revenue of $98.1 million during the period.
The LLP’s shares have risen 4.5 percent since the beginning of the year. The stock has fallen 1 percent in the last 12 months.
On the natural gas side, CNX Resources reported second-quarter net income of $42 million (19 cents per share). Earnings, adjusted for nonrecurring costs, came to 42 cents per share.
The results exceeded Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 12 cents per share.
CNX Resources posted revenue of $402.1 million in the period, also topping Wall Street forecasts. Four analysts surveyed by Zacks expected $382.6 million.
CNX Resources shares have risen 4 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed slightly more than 5 percent. The stock has declined 9 percent in the past 12 months.
The Associated Press contributed to this report.