1/ The earnings call season is underway and we started publishing Earnings Call Summaries last week. Coal availability is not looking good. Peabody Energy (#BTU) said they were unable to ship 23% of July month-to-date (thru Jul 28) customer nominations due to #Rail service issues
2/ As a #NaturalGas and #electricity analyst, I don’t really know what the term “customer nominations” means in the #coal business. That makes me ripe for substitution bias, which was discussed in LCMC’s January 2019 NG Research Dinner through #Tversky and #Kahneman’s work.
3/ Irrelevant detail? Here’s a counterpoint: 90% of Best Picture Academy Award (Oscar) "nominations" don't make it to the stage – context matters.
4/ I know what nominations mean in the natural gas shipping business and am in danger of substituting that meaning to “gain insight” into the current state of coal logistics. Coal and gas #logistics operate on two very different business models.
5/ NG has a dedicated transportation network (pipelines) based on a just-in-time approach, shipping the product from producing fields supported by centralized storage locations.
6/ Coal, on the other hand, shares its transportation infrastructure (rail) w/ other products, has distributed storage (on-site), and can be characterized as a just-in-case model.
7/ Any insight on coal logistics and contracts would be greatly appreciated.
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