North America coal short-term outlook July 2019: low gas prices dampen summer coal demand

International prices saw some relief in July after several months of continued losses. Average ARA prices saw the healthiest boost on the back of a heatwave and lower wind generation in Europe. Unfortunately, prices are still too low to provide healthy margins to US producers. However, international stock withdrawals will temporarily improve fundamentals overseas. Domestically, warmer weather peaked seasonal demand, but gas generation still prevailed over coal and left domestic coal prices unchanged. Average gas prices in July will continue declining amid oversupply. Even in the hottest regions, gas prices remained mostly unphased and did not allow for any coal-gas switching. Metallurgical prices are healthy in both domestic and international markets but continue falling from recent highs as demand in Europe and Asia faulters.