But Australia was down, 10 million tonnes. So, in reality, seaborne market was lost supply during 2023. So we certainly don’t see that as the issue would suggest that the 5 million tonnes out of the U.S. was really just for the most part, ringing additional volumes out of the existing portfolio, there aren’t a lot of shiny new assets being added. So we see sort of limitations to how much the U.S. can move up. But again, we think the market is really quite well supported, we think we’ll continue to have opportunities to move additional volumes, in that. In Asia, we’re shipping 40% of our tonnes in Asia today, we expect that to be 50%, and in relatively short order, and probably 60% thereafter. So, look, we’re moving in the right direction into that sort of a center of the steel of steel making future, and so feel good about all of that.
Alex Hacking: Okay, thanks for the color, you actually kind of answered my second question, which was going to be around, the tonnage that’s going into Asia. So let me just ask, I guess real quick, I apologize if I missed this. In terms of the shipments in the first quarter, they’re going to be, weaker or impacted by some logistical issues. Did you quantify that? Or can you quantify that? Thanks.
Deck Slone: We indicated they’d be less than ratable for 8.8 million tonnes. The one we use was modestly, I think, from a ratable perspective, you could look to a 5% to 10% reduction from ratable on the 8.8. So, that’s a vessel or to Alex. So, that’s just the kind of timing that you’re talking about here. And we’ll be making that up as we go forward. We don’t have any concerns about that.
Alex Hacking: Okay, perfect. Thanks guys.
Deck Slone: And that’s is missing, that’s just missing, look, like two vessels 150,000 tons. It doesn’t take much for volumes to slip from one port to the next. Look, I heard you say is, is moving quickly to resolve the issues. But, when you’re talking about a Force Majeure event and an outage that you know, span multiple days that really does result in a change in kind of the efficiency and productivity of the facility. They did a great job of getting things lined out. But it was multiple days of outages. So again, could have a small effect that we want to be prepared for the fact that we could see a couple of vessels slip out of Q1 into Q2.
Alex Hacking: Okay, thanks, makes sense. I get it, every vessel counts. Thanks.
Operator: The next question will come from Michael Dudas with Vertical Research Partners. Please go ahead. You are muted Mr. Dudas.
Michael Dudas : Thank you very much, bad finger here. [multiple speakers] everyone. So…
Deck Slone: You usually started [indiscernible] Michael, go ahead.
Michael Dudas: So anyway, first thing on the met coal front, maybe Matt can go over you admirable with return falls flat. But, what are your budgeting for 2024 on some of the input costs, labor consumables or contracting royalties et cetera. What are moving at a better rate or higher rate than normal, or kind of contribute to help those costs as we move to ’24. And is that something similarly given with expected better volumes we could think about for 2025 primarily?
Matthew Giljum: Michael, good question. I mean, you hit on everything. I mean, as the economy recovered as supply chain issues prevailed, we saw significant inflationary pressures from the industry. We saw supply chain issues, pushing things out, delaying, major pieces of equipment, you know, what have you. The team did a fantastic job of managing all of that, and continues to do a great job of managing all of those things. We continue to see higher inflation and certain things that repair parts and supplies that we’re acquiring, we’re seeing other things where inflationary has slowed down significantly. So that all gets factored in. From the Labor perspective, labor stuff in our industry, it really is, we’ve talked about this at length before, we’re very fortunate that we’ve got great long live, low cost assets that operate incredibly safely have a great culture, our most important asset our employees.
And when they feel that way, our turnover is lower than others. But still, labor is another impact that is affecting the costs. As we sit here today to be able to move flat from ’23 to ’24. Obviously, with some modest improvements in volumes, but still hard work by the team to manage cost across the board. As we stepped forward into ’25, one of the wonderful things about our portfolio is our ability to continue to manage to that first half quartile cost structure, once again, high volumes, great assets, great people running them, and we think we’re in a good position as we move forward.
Michael Dudas: Appreciate that. My second question, maybe for Paul, John, or maybe the group. Certainly, there’s been a pretty sizable shift in the federal market in the U.S. So gas prices, meandering quite low. Maybe a sense of what your customers are thinking. Any thoughts on plant retirements, pace, speed up. And as you’re thinking about the next several years, we have did have a nice recovery when prices are strong because of the Ukraine issue a couple of years ago. Then the pace of may be moderating or declining, what the PRB assets will contribute in the marketplace, given what maybe could be a little longer trough in the market, from a cyclical side relative to the secular issues that the face of your customers.
Paul Lang: Michael, its, Paul. I’ll start off and let the other jump in. As I said the past we look at this situation from a pretty pragmatic point of view. The last coal fired power plant in the United States was 10 years ago, last year, we saw about 13 gigawatts of coal fired generation shutdown. And there’s expected to be another 7 million seven gigawatts in ’24. The funny thing is, though, at the same time, 2023 was a record year for global coal consumption. And our shipping — 2022 was 2023 is looking like it also is going to be another record year. The thermal market as well as the seaborne thermal, as well as seaborne coking coal market, still remains very strong. And if you have assets in the U.S. that can get coal offshore, it still has a very good outlook.
And West Elk is a prime example of that where it’s a coal that sits very well in the Asian market, because it’s low ash and low sulfur and higher CV [ph]. So I, I think there is a diminishing role in the U.S. for call. Our kind of internal view is that the PRV will continue to drop about 5% or 10% a year. And I think what you’re seeing are we could see in 2024 has been an early part of year is, okay, $1.70 natural gas, it’s a pretty tough road to go forward.
Deck Slone: And I would agree with Paul, obviously. But, last year, utility consumption was around 390 million tonnes in the U.S. Going back to 2008, it was $1.1 billion. So clearly, there’s been a pretty, a pretty steep glide path here. We are absolutely prepared if we start to see a plateau, we’re prepared to continue to produce at higher levels have the ability to do that. We’ll take advantage of it. But I think we’ve been right to prepare for that sort of decline and do all the things that you know we’ve done, shrink the footprint, build federal mine reclamation fund, the PRV shipped up 230 million tons in total, in 2023, as Paul said, right now, we expect that to continue to step down 10% per year or so probably makes sense.
We could definitely see some delayed retirements of power plants that you know, that $50, or that $70 natural gas price right now is a green light saying, you’re okay to close. I will say this, concerns about reliability are growing, there is more discussion, we’ll see if we end up with some, some more significant delays. We’ve seen a few here lately. So we’re prepared to go into direction, if it continues to decline the way that it has, we’re prepared to bring the plane in for a soft landing in Powder River Basin. If suddenly we see a plateau, we’re also ready to capitalize it.
John Drexler: And Michael, I’ll round out those comments with just the wonderful folks out at our operation that have done an incredible job, through the entirety of that cycle, and through the decline over many years, to continue to manage the asset and nimbly, and to do it in a way to manage the costs. You go back to high watermark for the Powder River Basin or Black Thunder was 117 million tons. You know, this year, it was 60. Right now, you see us guiding to 50. Through the entirety of that decade of change. The team there is embraced and continued to manage the cost and to be able to put us in a position to continue to generate cash. And we got high confidence no matter where that goes as we go forward that we’re in a position to do the same thing as well.
Operator: The next question will come from Chris LaFemina with Jefferies. Please go ahead.
Chris LaFemina : Hey, thanks, guys. It’s Chris LaFemina. Just had a question. I had a question about the capital return strategy. So Paul, you mentioned accumulating this cash as dry powder you’ve talked about in the past as well, you’ve targeted $100 million of cash build, which you achieved in the quarter. So as you go forward from here, let’s assume that you don’t get the pullback in your stock price. Should we then assume that all free cash flow will be returned to shareholders? And it’s really just a question of whether it’s dividends or buybacks? Or do we continue to accumulate more cash waiting for that potential pullback to happen? It’s my first question.
Paul Lang: Well, Chris, I think the real simple answer is that, we got ourselves to where we said the kind of the upper end of our cash ranges and we’re ready to move on. I think we’ve positioned ourselves very well. And I think there’s two strong arguments for moving forward with heavier share repurchase right now. I think first and foremost, is the discussion here earlier, the fundamentals for metallurgical segment are still pretty good. I’ve seen is, looks pretty strong over the medium to short term. And that’s probably not baked in the dynamic or it’s not reflected in our share price. The second is, John pointed out, we expect ongoing operational improvement in ’24, and ’25. So, I think we set ourselves up well, for what’s coming. And I feel good about the position we put ourselves.
