A  continued strong seaborne market for US coal boosted railroad CSX's third-quarter export 

coal tonnage by 60% year over year, while domestic shipments fell 12% mostly on poor utility 

demand. 

CSX on Tuesday said Q3 seaborne volumes totaled 8.8 million st, up from 5.5 million st in the 

year-ago period. Metallurgical coal volumes were up 25% to 5 million st and thermal volumes 

surged 153% to 3.8 million st. 

Fredrik  Eliasson, chief  sales and marketing officer, said during an earnings call the railroad 

believes there will be a solid seaborne market into 2018 based on expected prices. 

"Where the forward curve is right now, it's a good opportunity for the US producers to partici 

pate next year as well," Eliasson said. 

CFO Frank Lonegro said "global benchmarks support continued strength in export coal," and 

added that CSX sees fourth-quarter export volumes to remain similar to Q3 counts. 

The railroad's domestic coal shipments slipped to 16.1 million st in Q3, down from 18.2 million 

st in the year-ago period. Utility tonnage fell 11% to 11.7 million st and shipments of coke and 

iron ore slipped 12% to 4.4 million st. 

CSX  attributed  some  of  the  loss  in volumes to utility outages in the Southeast because of 

Hurricane Irma. Lonegro said some utility customers were shut down for days because of the 

storm, while a few experienced outages for multiple weeks. 

Eliasson said CSX's "best expectation" for Q4 is for utility volumes to remain flat at Q3 levels. 

"We're seeing a market that is in pretty good shape," Eliasson said "Clearly, this summer was 

not  helpful,  but we  are still seeing natural gas prices around $3, which is very helpful. We'd 

like to have them a little higher, but is certainly more helpful than what we saw last spring." 

Eliasson  noted  utility  stockpiles  in  the  north  remain  high, but inventories in the south are 

lower. He said the railroad should have an "opportunity to replenish some of those [utilities] in 

the south, which is usually a longer length of haul and higher revenue." 

CSX Q3 coal revenues of $514 million were up 10% from the year-ago period, while revenue 

per  unit  gained  5%  to $2,358. Total coal volumes for the quarter were up 5% from 2016 at 

24.9 million st.