Peabody Energy 3Q14 Earnings Call notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Chinese imports of met coal were tepid, but India had strong growth

“Seaborne metallurgical coal market saw tepid Chinese imports and steel production growth, while India remained a bright spot. India’s metallurgical coal imports increased over 20% through September, further indication of the country’s strong reliance on the seaborne market to meet the vast majority of its metallurgical coal needs.’

China will continue to rely on coal

“Peabody recently completed a more thorough review of China, and when we looked through the short-term fluctuations, we’re confident that coal will be the dominant energy source for decades to come. China will continue to depend on coal for economic development and affordable energy to support major urban population growth, and China has taken dramatic steps to improve emissions by installing more control technologies. This year alone China is adding approximately 150 gigawatts of NOx controls. That’s equivalent to half of the entire U.S. coal fleet, with more to come.”

Coal is taking back some share in the US

” in the U.S., coal volume is on pace to increase 15 million tons in 2014, reflecting the competitiveness of coal even with a mild summer and continued rail constraints. U.S. coal generation increased 3% through September despite summer cooling degree days over 8% below normal levels in the coal heavy legions. PRB inventories ended this summer at the lowest level in nine years and the restocking period is expected to continue through 2015 and beyond as some utilities look to increase stockpiles in response to rail constraints”