The overall number of railcars in storage reached to roughly 318,000 as of June, an increase of 19,000 when compared to March 31, 2012. However we estimate that the number of coal cars in storage decreased from about 35,000 railcars at the end of March to approximately 33,000 at the end of June and continued to decrease further to 24,000 at the end of July.

While U.S. railcar loading for most commodities remained strong, coal continued to be challenged. When compared to the second quarter of 2011, commodity loadings in the second quarter of 2012 were down 3.2% driven by coal and agricultural products. Coal loadings decreased by 11.7% and intermodal container loadings increased by 6.3% in the second quarter versus the same quarter in 2011.

U.S. electricity generation where coal competes as a power generating fuel was down 2.6% in the first half of the year compared to the first half of 2011. Overall the U.S. coal production was down 6.2% in the first half of 2012 versus the same period last year.

Lower natural gas prices and lower electric power consumption continued to negatively impact coal demand. Efficiency of the railroads and the anemic economic recovery also impacted overall coal demand. The Energy Information Administration's latest estimate report stockpile as of May 2012 is 203 million tons approaching the record level of 2009, 35% above the 10-year average and 16% above the year-ago stockpile level.

Indications are that harder than normal summer is helping to reduce the absolute level of the utility coal stockpile, but it is difficult to say when the stockpile will return to historical average levels.

Read the rest of this transcript for free on

If you liked this article you might like

West Marine Gets Acquired; Don't Miss the Boat on These Other Double-Nets

How My Outperforming Value Portfolio Is Bucking the Trend

These 5 Amazing Stocks to Own for the Rest of 2017 Aren't for the Faint of Heart

My 5 Favorite Stocks for the Rest of 2017 Aren't for the Faint of Heart

What's Doing Best in New Portfolio? Take a Guess