Hội nghị công bố kết quả kinh doanh Q3/2026 của Core Natural Resources (CNR): Hoàn trả 90 triệu USD, đà tăng trưởng Q4

Điểm nhấn chính

• Core Natural Resources công bố lợi nhuận ròng quý 3/2026 đạt 9 triệu USD, tương đương 0,18 USD trên mỗi cổ phiếu pha loãng, và EBITDA điều chỉnh đạt 165 triệu USD. EBITDA điều chỉnh quý 2 đạt 324 triệu USD, bao gồm khoảng 125 triệu USD từ khoản bồi thường bảo hiểm của mỏ Leer South.
• Công ty đã tạo ra khoảng 80 triệu USD dòng tiền tự do sau 94 triệu USD chi phí vốn. Doanh nghiệp đã hoàn trả 90 triệu USD cho cổ đông, tương đương 112% dòng tiền tự do trong quý.
• Kể từ khi thành lập vào tháng 1/2025, Core đã phân bổ 450 triệu USD thông qua chương trình hoàn vốn cho cổ đông. Số lượng cổ phiếu lưu hành ròng đã giảm 5,1 triệu cổ phiếu, tương đương gần 10%, sau 7 quý.
• Core đã nâng hoặc thu hẹp biên độ dự báo chi phí tiền mặt năm 2026 trên cả ba phân khúc, với lý do lạm phát kéo dài, chi phí vật tư và bảo trì tăng cao, giá dầu diesel ở mức cao cùng sự biến động trong hoạt động khai thác mỏ.
• Ban lãnh đạo kỳ vọng hiệu quả hoạt động trong quý 4 sẽ khởi sắc hơn. Hai chuyến tàu chở than luyện kim giá cao bị trì hoãn đã hoàn tất bốc hàng vào đầu tháng 10, trong khi tốc độ khai thác đã cải thiện sau các gián đoạn địa chất trong quý 3.
• Kể từ quý 2, Core đã ký hợp đồng cung cấp khoảng 29,4 triệu tấn kéo dài đến năm 2031. Ban lãnh đạo cho biết thị trường than nhiệt và than luyện kim đường biển khởi sắc hơn đang mang lại những cơ hội định giá tốt hơn.

Dữ liệu tài chính trọng yếu

EBITDA điều chỉnh quý 3 thấp hơn 33 triệu USD so với quý 2 sau khi loại trừ khoản bồi thường bảo hiểm trong quý 2. Quý này cũng ghi nhận khoản chi phí 17 triệu USD cho chương trình chia sẻ lợi nhuận 401(k) của công ty.

Kết quả kinh doanh và hoạt động

Than nhiệt High-CV

Giá than nhiệt đường biển tiếp tục mạnh lên trong quý 3 và bước sang tháng 10. Ban lãnh đạo dẫn chứng các mức giá tham chiếu tại Đại Tây Dương và Thái Bình Dương tăng cao, cùng nhu cầu liên tục từ Ấn Độ, nơi Core đã ký hợp đồng cho khối lượng giao nửa đầu năm 2027 với mức giá xấp xỉ 80 USD/tấn tính về mỏ.

Giá bán thực tế trong quý 3 giảm so với quý trước do West Elk chiếm tỷ trọng lớn hơn trong cơ cấu bán hàng. Ban lãnh đạo kỳ vọng sản lượng từ PAMC tăng lên cùng các cam kết giá cao hơn sẽ nâng giá bán trung bình của than nhiệt High-CV trong quý 4 lên khoảng 62–63 USD/tấn.

Biến động địa chất và chi phí đầu vào tăng cao đã ảnh hưởng đến hai lò than dài (longwall) trong quý 3. Ban lãnh đạo cho biết tốc độ khai thác đã cải thiện khi bước sang quý 4 và có thể vượt kỳ vọng. Doanh nghiệp cũng nhận thấy cơ hội gia tăng sản lượng mỏ West Elk, tùy thuộc vào điều kiện logistics.

Than luyện kim

Thị trường than luyện kim đường biển đã khởi sắc trong quý 3. Hai chuyến tàu chở than giá cao bị hoãn do cơn bão đông bắc cuối tháng 9 đã hoàn tất bốc hàng vào đầu tháng 10, khiến doanh thu liên quan chuyển sang quý 4.

Cho năm 2027, Core đã chốt được hợp đồng khoảng 2,4 triệu tấn cho các khách hàng Bắc Mỹ với mức giá cố định cao hơn khoảng 4–5 USD/tấn so với năm trước. Các cam kết này bao gồm mức tăng 50% sản lượng than High-Vol B so với năm trước.

Ban lãnh đạo cũng nhấn mạnh các cơ hội xuất khẩu tiềm năng nếu Trung Quốc áp dụng khung giảm thuế đề xuất đối với than luyện cốc. Mọi sự tham gia sẽ phụ thuộc vào mức giá thu về ròng (netback) tương đối giữa các thị trường Trung Quốc, Ấn Độ và Bờ Đông Mỹ.

Lưu vực Powder River

Sản lượng than tại PRB đã tăng hơn 3 triệu tấn từ quý 2 sang quý 3. Ban lãnh đạo kỳ vọng sản lượng quý 4 sẽ tiếp tục duy trì ổn định và đưa ra dự báo sơ bộ về doanh số bán hàng năm 2027 đạt khoảng 48 triệu đến 50 triệu tấn.

Công ty hiện đã ký hợp đồng cung cấp khoảng 40 triệu tấn than PRB cho năm 2027. Ban lãnh đạo cho biết hoạt động vận hành hiệu quả đã giúp bù đắp chi phí dầu diesel ở mức cao trong quý 3.

Dự báo của ban lãnh đạo

Việc điều chỉnh dự báo chi phí than nhiệt High-CV phản ánh tình trạng lạm phát dai dẳng đối với vật tư, bảo dưỡng, điện năng và chi phí thuê nhà thầu. Hoạt động khai thác than luyện kim phải đối mặt với kế hoạch di dời lò than dài tại mỏ Leer và Leer South trong quý 4. Dự báo chi phí tại PRB tăng chủ yếu do giá dầu diesel ở mức cao.

Ban lãnh đạo kỳ vọng hiệu quả hoạt động quý 4 sẽ cải thiện so với quý trước khi các vấn đề địa chất trong quý 3 lắng xuống. Hoạt động trong tháng 10 được mô tả là có khởi đầu thuận lợi, dù kiểm soát chi phí vẫn là ưu tiên hàng đầu khi bước sang năm 2027.

Rủi ro và các yếu tố cần theo dõi

• Các gián đoạn địa chất đã ảnh hưởng đến ba lò than dài trong quý 3, bao gồm hai lò tại PAMC. Ban lãnh đạo cho biết các điều kiện đã biết đều được đưa vào kế hoạch khai thác, song các sự cố sập nóc lò ngoài dự kiến, vỉa cát kết và điều kiện trần lò bất lợi vẫn rất khó dự báo.
• Lạm phát dai dẳng đang ảnh hưởng đến vật tư, bảo dưỡng, điện năng, chi phí nhà thầu, các linh kiện khai thác chứa vonfram và nhiên liệu diesel.
• Cước vận tải và phí lưu tàu vẫn ở mức cao, mặc dù hầu hết các lô hàng xuất khẩu đều được bán theo điều kiện FOB, giúp hạn chế mức độ nhạy cảm trực tiếp của Core trước biến động chi phí vận tải.
• Giá khí tự nhiên ở mức thấp đã gây áp lực lên lượng tiêu thụ than của Mỹ. Ban lãnh đạo cho biết lượng tiêu thụ than tại Mỹ từ đầu năm đến nay đã giảm khoảng 20 triệu tấn sau khi tăng 40 triệu tấn trong năm trước.
• Nhu cầu tiềm năng từ Trung Quốc phụ thuộc vào việc điều chỉnh thuế quan và mức giá thu về ròng (netback) xuất khẩu tương đối; ban lãnh đạo vẫn chưa cam kết cung cấp thêm sản lượng cho thị trường này.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

• Hoàn trả cho cổ đông: Core tái khẳng định chính sách hoàn trả ít nhất 75% dòng tiền tự do thông qua mua lại cổ phiếu và chia một khoản cổ tức nhỏ. Ban lãnh đạo cho biết các điều kiện thị trường hiện tại có thể hỗ trợ việc mua lại vượt ngưỡng đó, như đã diễn ra trong quý 3.
• Vốn lưu động: Các khoản phải thu thương mại tăng khoảng 40 triệu USD, một phần do hai chuyến tàu chuyển sang tháng 10 và giá than tăng. Ban lãnh đạo cho biết một phần vốn lưu động có thể được giải phóng khi các chuyến hàng bình thường hóa trở lại.
• Doanh số than High-CV năm 2027: Khoảng 70% sản lượng than High-CV dự kiến cho năm 2027 đã được ký hợp đồng. Ban lãnh đạo cho biết giá đã cam kết đang có xu hướng tăng so với cùng kỳ năm trước, trong đó 25%–30% sản lượng vẫn chưa ký kết, chủ yếu là sản lượng từ PAMC.
• Cơ hội tại thị trường Trung Quốc: Ban lãnh đạo đã dẫn chứng khối lượng giao hàng trong lịch sử khoảng 4 triệu tấn từ PAMC và 1 triệu tấn từ Leer để minh họa cho tiềm năng công suất, nhưng cho biết việc phân bổ trong tương lai sẽ phụ thuộc vào việc thực thi thuế quan và mức giá thu về ròng (netback) tối ưu tại từng mỏ.
• Chi phí năm 2027: Ban lãnh đạo nhận thấy cơ hội cải thiện chi phí trên mỗi đơn vị sản phẩm nhờ sản lượng cao hơn và hiệu quả vận hành, dù thừa nhận rằng lạm phát và các điều kiện địa chất khó lường có thể hạn chế tiến độ này.

Toàn văn biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good morning, ladies and gentlemen, and welcome to the Core Natural Resources Incorporated Third Quarter 2026 Earnings Conference Call. [Operator Instructions]. This call is being recorded on Thursday, November 5, 2026.

I would now like to turn the conference over to Mr. Deck Slone. Please go ahead.

Deck Slone

Good morning from Canonsburg, Pennsylvania, everyone, and thanks for joining us today. Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the Private Securities Litigation Reform Act. Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain. These uncertainties, which are described in more detail in the annual and quarterly reports that we file with the SEC, may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss this morning at the end of our press release, a copy of which we have posted in the Investors section of our website at corenaturalresources.com. Also participating on this morning's call will be Jimmy Brock, our Chairman and CEO; Mitesh Thakkar, our President; Nate Tucker, our CFO; and Bob Bracewite, our Chief Commercial Officer. After some formal remarks from Jimmy, Mitesh and Nate, we will be happy to take questions.

With that, I'll now turn the call over to Jimmy. Jimmy?

James Brock

Thank you, Deck, and good morning, everyone. During the third quarter of 2026, Core again demonstrated the power of our strategically diversified, world-class highly cash-generative operating portfolio. Indeed, Core has generated robust levels of free cash flow and returned substantial capital to stockholders in each quarter since the company's formation in January of 2025. In short, the expanded Core platform is delivering exactly as intended. We have delivered value to stockholders in a strong, consistent and reliable manner even while navigating the inherent variability of coal markets and the mining process itself.

Underscoring this fact, we have now deployed a total of $450 million in our capital return program since the company's inception, including a total of $90 million in the quarter just ended. As the centerpiece of this program, we have reduced a net total of 5.1 million shares or nearly 10% of shares outstanding in the 7 quarters since the program's launch. Notably, we have achieved that reduction in share count during a period of relative market weakness and during a period when the operating platform had yet to round into form. There is good news on both fronts.

First, Coal markets appear to be shifting into a higher point in the cycle. Second, and perhaps more importantly, the Core team continues to make steady progress toward its ultimate objective of delivering operational excellence on a steady and sustained basis. Both developments have the potential to drive even stronger returns to stockholders in the future. While Mitesh will discuss the Coal markets in more detail momentarily, let me stress that I am confident we are building significant operational momentum even if the normal geologic variability masked that progress somewhat in Q3. I assure you that the Core team remains sharply focused on managing every one of our controllables, tightly and intensively by operating safely, driving continuous improvement, managing consumables with rigor and taking cost out at every turn. In doing so, we are building an exceptional foundation for long-term growth, success and value creation across a wide range of market environments.

With that, I will now turn the call over to Mitesh to provide an operational and market update.

Mitesh Thakkar

Thank you, Jimmy, and good morning, everyone. As Jimmy mentioned, the market backdrop improved during Q3 but remains slightly uneven across our product portfolio. Of our 3 major business segments, we are seeing the most positive momentum in the High-CV Thermal segment, followed by the metallurgical and the Powder River Basin segments. On the High-CV Thermal side, we continue to see favorable market conditions with stronger Atlantic and Pacific export benchmarks supporting improved pricing opportunities for PAMC and West Elk. Seaborne thermal pricing strengthened meaningfully through the third quarter and into October. This represents a significant improvement from the weaker pricing environment experienced late last year and reinforces our view that high-quality thermal coal continues to play an important role in meeting global energy needs.

Given our access to the seaborne market and the quality of our products, we believe we are well positioned to capitalize on these improving market conditions. In the Metallurgical segment, seaborne markets also strengthened throughout the third quarter, driven partially by continued supply tightness in China. We also saw a potentially meaningful development following the September meeting between President Trump and President Xi where China agreed to import at least 10 million metric tons of U.S. Coal in both 2027 and 2028.

We believe this commitment could create an important additional outlook for U.S. metallurgical coal and further expand export opportunities for U.S. producers. The coal commitment is supported by a proposed tariff reduction framework that explicitly covers coking coal. We also saw positive momentum in the domestic market due to strength in the U.S. steel industry. For 2027, we secured approximately 2.4 million tons of metallurgical coal for delivery to the North American customers at fixed prices averaging above last year's commitments.

Finally, moving to the PRB and High-CV domestic power generation markets, we continue to believe the long-term outlook for U.S. power demand is compelling supported by the expansion of data centers and broader industrial activity. We believe the benefits of this demand growth will be particularly concentrated in the PJM and other Eastern U.S. markets, which is the epicenter of data center build-out.

Looking into 2027, the EIA currently projects commercial electricity demand, which includes data centers, to increase 2.8%, while industrial demand is projected to increase 2.7% in the U.S. That is a notable improvement from a decade ago when the growth rate of electricity demand was forecasted to retreat. We believe these trends reinforce the importance of reliable, dispatchable generation and create a constructive longer-term backdrop for our thermal business.

In summary, Core took advantage of the current market environment to further strengthen our sales position. Since the second quarter, we have broadened and extended our sales book, securing approximately 29.4 million tons of contracted volume through 2031 at attractive prices. This represents approximately 122% of our 3Q '26 sales volume and provides a strong foundation as we move forward.

Now let me make some quick comments on our operations. In a nutshell, our diversified portfolio of operating assets did what it was designed to do. It generated strong free cash flow and allowed us to return a substantial amount of capital to shareholders. The issues we encountered, which primarily affected the quarter-over-quarter performance in the Metallurgical and High-CV Thermal segments, were partially offset by the strong quarterly performance in the PRB segment. Our team in the PRB did an excellent job of managing costs in the face of elevated diesel prices by running efficiently and complementing the marketing team's efforts to increase volumes on a quarter-over-quarter basis.

In the Metallurgical segment, costs were less favorable than in Q2, reflecting typical mining variability. We also had 2 high-priced coal vessels delayed by the late September Nor'easter. Both vessels finished loading in early October, shifting those sales into the fourth quarter. The good news is we will benefit from those higher-priced shipments in the fourth quarter, and our mining rates have now substantially improved as well. As you can see, despite these developments, we continue to track near the midpoint of our full year cash cost guidance range for this segment.

In the High-CV Thermal segment, we also encountered some normal geologic variability and increased input costs at 2 of our longwalls that dampened our quarterly performance. However, we entered into the fourth quarter with strong momentum and are currently mining at rates that may exceed our expectations. In summary, all our operations are now running well, and we are expecting a strong performance in the fourth quarter.

Now let me turn the call over to Nate to discuss the financial update.

Nathan Tucker

Thank you, Mitesh, and good morning, everyone. This morning, we reported solid third quarter financial results. For 3Q '26, we reported net income of $9 million or $0.18 per diluted share and adjusted EBITDA of $165 million compared to net income of $126 million and adjusted EBITDA of $324 million in 2Q '26.

Let me put our third quarter results into better perspective. As a reminder, our second quarter benefited from approximately $125 million associated with the Leer South insurance settlement. When removing that effect, our 3Q '26 adjusted EBITDA was $33 million lower than 2Q '26. However, a part of that was due to a $17 million expense tied to recognizing our 401-K profit-sharing incentive due to our strong year-to-date results. We are now firmly on track to achieve certain incentive compensation free cash flow targets for the full year of 2026, which triggered booking the expense for the amount that was earned as of September 30.

When taking this into account, plus our planned annual summer shutdown in the third quarter, our results were mostly in line with 2Q. From a cash flow perspective, we spent $94 million in capital expenditures and generated approximately $80 million of free cash flow during the third quarter. This compares with $148 million of free cash flow in the second quarter, which benefited from an incremental $50 million in insurance proceeds versus the current period. As a reminder, we are currently recognizing the 45x tax credit in adjusted EBITDA for 2026. However, this should provide an additional source of free cash flow through working capital release in future periods.

From a capital allocation perspective, we had a very active third quarter. During 3Q '26, we returned $90 million or 112% of our free cash flow to our shareholders, which was significantly above the $68 million returned in 2Q '26. As Jimmy highlighted, since February 2025, we have returned 85% of our free cash flow to our shareholders via our capital return program, which includes a net reduction of approximately 10% of our shares outstanding since the program's launch and underscores the meaningful progress we've made in reducing the share count in a short period of time.

At the end of the third quarter, we had total liquidity over $1 billion, including $444 million in unrestricted cash and cash equivalents and short-term investments. This represents approximately a $30 million reduction in cash and short-term investments compared to the second quarter driven in part by our strong capital returns during the third quarter. Even with the robust shareholder returns, we maintained our balance sheet strength and net debt neutral position. Going forward, the strength and diversity of our operational footprint positions us to generate substantial free cash flow through all parts of the commodity cycle, providing significant flexibility in how we deploy capital and create long-term shareholder value.

Now let me provide an update on our expectations for the remainder of 2026. As indicated in today's earnings release, we are adjusting certain sales and cash cost guidance ranges. Starting with the High-CV Thermal segment. We have a total contracted volume of 31.4 million tons remaining near fully contracted for the year. Our average realized coal revenue on the volumes committed is approximately $59 per ton. For SEC cash cost, we are increasing and tightening our guidance to an updated range of $40 to $41 per ton from the previous range of $39 to $40.50 per ton.

The adjustment primarily reflects inflationary pressures that have proven more persistent than previously anticipated, particularly across supply and maintenance costs, power and contractors. In the Metallurgical segment, we added 600,000 tons to our sold position, bringing the segment to 9.3 million coking tons contracted for 2026, with approximately 7.6 million tons priced and an expected average realized coal revenue of approximately $123 per ton. As for SEC cash cost, we are tightening the range from $86 to $91 per ton to an updated range of $88 to $90 per ton.

In the fourth quarter, we have a planned longwall move at Leer and an accelerated longwall move at Leer South due to its strong performance this year. For the PRB segment, our contracted position now stands at approximately 48.5 million tons at an average committed price of $14.28 per ton. From an SEC cash cost perspective, we are increasing guidance to a range of $13.75 to $14 per ton, mainly due to persistently elevated diesel prices. As we close out the year, our focus remains on executing against our operating plans, controlling costs and positioning the company to take advantage of an increasingly constructive commodity environment.

Now let me pass it back to Jimmy for some closing remarks before we open the call for Q&A.

James Brock

Thanks, Nate. First, we are encouraged by the momentum we saw in the third quarter. We believe the underlying trajectory of the business remains strong, and our teams are intensely focused on execution as we close out the year. In fact, October has already set a positive tone for the fourth quarter with operations off to a strong start and the geology-related variability we experienced in the third quarter now behind us. Second, the market environment has become increasingly constructive. Our marketing team continues to take a disciplined approach to adding commitments, balancing the opportunity to lock in attractive margins today while preserving exposure to further market upside.

Third, we remain highly focused on cost containment. We see additional opportunities across the organization to improve productivity, capture efficiencies from our operating platform and further enhance margins. Cost discipline will remain a major priority as we move into the fourth quarter and into 2027. And finally, we remain committed to disciplined capital allocation. Our strong balance sheet and free cash flow generation provide considerable flexibility as we evaluate opportunities to return capital to shareholders while investing in the long-term value of the business. We believe Core is exceptionally well positioned heading into the final months of 2026 and into 2027. We have a differentiated portfolio of high-quality assets, a talented workforce, substantial market reach and a clear strategy focused on safely maximizing the long-term value of the business. Lastly, I want to thank our employees for their continued hard work and commitment and all of our partners and stakeholders for their continued support.

With that, I will hand the call back over to the operator to begin the Q&A portion of our call. Operator, can you please provide the instructions to our callers?

Operator

[Operator Instructions] So first question comes from Lucas Pipes of B. Riley FBR Capital Markets.

Phần hỏi đáp

Lucas Pipes

For the record, I work at Balyasny Asset Management, there must be something old in the archives. But Nate, congratulations. Lots of earnings going on this morning, but maybe just to start out, curious how the international dynamics are impacting both your seaborne thermal as well as your met coal netbacks. Obviously, TTS in Europe has been very strong, but freight rates are elevated. So if you could maybe speak to netback pricing for your Pennsylvania product in particular, and then also netbacks on the met coal side, that would be very helpful.

Robert Braithwaite

Lucas, this is Bob. In Europe, thermal coal pricing has strengthened meaningfully as we move throughout the third quarter and also into October. API 2 benchmark certainly moved higher, and that was supported again by the stronger natural gas price and power prices. And with winter approaching and continued uncertainty around energy supply, we believe that market fundamentals remain supportive for our pricing in near term, both for our PAMC coal and for West Elk. But really, India still continues to be the strong story for us. Petcoke imports are down over 50% year-on-year into India. And even most recently, we've been able to contract volumes into India for the first half of 2027, prices near $80 back to the mine.

So as we move through Q4 and into 2027, we certainly anticipate a meaningful increase in our ASP in our High-CV segment. On the coking side, a lot of similar things happening there. You have U.S. East Coast prices are up, PLV prices are up. We've been successful in placing a lot of our volume in Q4 and beyond also against PLV. So we're going to see the benefit there in Q4 and beyond as well. And then the million-dollar question is China, right? We're certainly seeing a lot of interest there over the past month, and we're certainly going to play in that market should that ABR open. When you look at where PLV CFR China prices are today and you take away freight, it's still better than what U.S. East Coast prices are. So if that continues, I think we'll certainly participate there as well.

Mitesh Thakkar

And Lucas, as you already know, I think we have a very strong operating platform with a lot of products. So we are exposed to a lot of these tailwinds. And some of our products like the PAMC product in the High-CV Thermal segment can strand multiple markets, whether it's the industrial market or metallurgical coal market, crossover market in China, as Bob mentioned, as well as the domestic power generation market. And we try to make sure that we are getting the best arbitrage for our products. So very excited about what the market has and hold for us and looking forward to '27.

Lucas Pipes

That's helpful. And then on the cost side, obviously, pressures from steel would expect some other inputs to lithium prices for or tungsten rather for the mining units. Can you speak to kind of what you see in Q3 cost as kind of inflationary raw material pressures versus the mix in terms of different mines contributing more or less to the sales.

James Brock

Lucas, you hit on some of them. I mean, tungsten for sheer bits and minor bits has certainly played a big part of it as well as diesel fuel on the cost side. But then you look at some of the like we said in the earnings script, some of the geologic variabilities that we had, we had 3 of our longwalls affected by some of those. So I think it's just primarily mining. We'll handle that side of it. We know how to do it. But some of these inflationary pressures when you start looking at the cost of diesel, the cost of minor bits, some of those things are the things that we can't control that we have to find efficiencies or some other way to offset those.

Mitesh Thakkar

And Lucas, if you look at our guidance also, we are expecting improvement at the midpoint of the guidance range on a sequential basis in Q4 versus Q3 as some of the geological issues are behind us. So I think, yes, the inflationary pressures are real, but there are some operating indicators that we are also noticing that makes us more optimistic for Q4 versus Q3.

Operator

Our next question comes from George Eadie of UBS.

George Eadie

Bob and Mitesh, just building on Lucas' first question there. What percent of the High-CV book is contracted for '27 and '28? And can you maybe help us with the sort of average price of those tons at the moment as a group considering West Elk blended in as well?

Robert Braithwaite

So George, we announced this morning, we concluded or contracted 29.4 million tons. That runs through 2031, but 2027 specifically was just around $16 million. And on the High-CV side, we added about another $6 million. So sitting here today, we're roughly about 70%, give or take contracted. And the price direction is certainly higher year-on-year. I think you heard me say that we did conclude some volume pretty close to $80 for the first half of 2027. So I would say sitting here today, you're looking at a very similar level that we're anticipating in Q4, which is that $62, $63 type level with what we have committed, and we certainly have a lot of potential upside there as we have, call it, 25% to 30% left of our volume to sell, which majority of that is PAMC tons.

George Eadie

And then just back to this China stuff as well, this 10 million tons potential. Can you talk us through the opportunity for you guys here? Like I know you're probably selling or are selling some into China. But if that tariff went, how much are we talking and also crossover PAMC tons? Like if I was to guess, say, 3 million tons or 4 million tons per annum of PAMC crossover and the same of Leer, is that reasonable as sort of a guess if that tariff goes?

Robert Braithwaite

So if you look back to 2024, CONSOL moved about 4 million tons of PAMC, Arch moved about 1 million tons of Leer. So you know that's -- I'd say the potential is there to move that -- at least that, if not more. But obviously, we're going to wait to see what this looks like once the tariff reduction, assuming it happens, and we'll place the tons where we get the best value. At PAMC, I'd sit there and tell you today, India still makes the most sense for us based on where those netbacks are. But as I just mentioned, if you look at where CFR PLV prices are into China and take away where freight is today, that market certainly looks a lot more attractive than selling on an East Coast -- U.S. East Coast basis. So when the opportunity arises, we'll take a look and see where things are and make the best decision forward for the company to maximize our revenue and realizations back to the mine.

George Eadie

Okay. Could you probably next year even push, call it, another 1 million tons out of West Elk? Could you run PAMC a little bit harder as well to feed into all these markets? Or do you still sort of view it more as a game of selling a bit less domestic and exporting the rest?

James Brock

No I think there's definitely an opportunity for us to push more West Elk coal. We have it running on a schedule now. Again, logistics is a big part of what we do out there, but we certainly will have an opportunity to move more of the West Elk coal.

Operator

Next question comes from Nick Giles of B. Riley Securities.

Nick Giles

Just wanted to touch on shareholder returns. They were obviously strong here in 3Q. And so first of all, what would working capital look like in the fourth quarter? And just how should we think about the likelihood for this level of buybacks to repeat?

Nathan Tucker

Yes. So I'll start, Jimmy. Hey this is Nate, Nick. So on the working capital, yes, we did build some trade AR in the quarter, and Mitesh kind of talked about in his prepared remarks that we had some vessels kind of slip into the fourth quarter. We also -- the other thing I'd point out is trade AR is also moving up, too, just for the fact that met coal pricing in particular, and thermal as well, but pricing is moving up. So our trade AR is moving up because of that. So I think once we get on a kind of a normal churn there, there could be some release as well. I think we built about $40 million, as I said, in the quarter. So there's a potential for that to kind of move around. Now we're always going to have shipments that can move around. Sometimes these is days at a time. So you're talking just a day at the end of the quarter it can move. But at least those shipments that happened at the end of the September into October, those will certainly release as well.

James Brock

And Nick, this is Jimmy. As we generate more free cash flow, we'll certainly have some opportunities. As we said, we've been very disciplined about that. We said we're going to return at least 75% of our free cash flow back to shareholders in the form of repurchasing shares as well as a small dividend. And we've done that. If you look at Q3 here, we're around 112% of free cash flow to that. And the market is certainly providing us some opportunities to go on the upside of buying back shares currently where we are today.

Nick Giles

Understood. And then maybe just on freight and demerge. It seems like that has been impacting producers across the board. Can you just speak to kind of the sensitivity of that if we were to see freight rates kind of moderate, how dollar for dollar for that is it in your sales realization?

Robert Braithwaite

So we do a lot of our business on FOB, Nick. So I mean, we do have some exposure. We do sell some cargoes on a CFR basis. But again, it really does move with the index, although recently, I'd say you've seen freight come off pretty significantly. I mean we're seeing freight rates in the 50s to India today. I'd say they're closer to lower 40s. So again, it's -- I'd say it's just more noise than anything. And as far as demerge is concerned, it's kind of a normal course of business. That's why we try to do everything we can to make sure that the coal is placed at the terminal in preparation for the vessel loading. So therefore, we can minimize that. But demerge rates are up. That's certainly the case. And that all started obviously with the tightness because of the straight being closed. But overall, we just view that as kind of a normal course of business.

Nick Giles

And sorry, maybe just to ask more clearly, if we were looking at freight rates and we did see them come down, say, $10 a ton. Is there a good rule of thumb that you would apply to kind of total net realization similar to the way that you provide sensitivity for movements in API 2?

Robert Braithwaite

Yes. I'd say it's not that significant because, again, majority of our cargoes that we do sell is on an FOB basis.

Operator

Next question comes from Nathan Martin of StoneX.

Nathan Martin

You mentioned in your release and your comments as well, you committed now, what, 2.4 million metallurgical tons in the domestic market at a higher year-over-year price. Can you give some more details there around that pricing and quality of those tons and then you expect an opportunity to sell any additional domestic tons for '27?

Robert Braithwaite

So Nate, I think we mentioned this morning, again, 2.4 million tons for '27. Those tons are priced roughly about $4 or $5 higher year-on-year. But I would say what's very encouraging for us is that volume includes a 50% increase in our High-Vol B tons compared to last year. So the 2.4 million gives us a solid base load of committed volume, what we would call attractive pricing as we enter 2027, while certainly leaving meaningful tonnage available to capitalize on opportunities in the export market as well.

Nathan Martin

Okay. I appreciate that, Bob. And then I also wanted to ask about High-CV Thermal realizations during the quarter. They were down $1.50 sequentially, obviously, in a market that was getting stronger. So maybe can you kind of walk us through the drivers there? And is it fair to assume that realizations improve in the fourth quarter, especially given the current pricing backdrop?

Robert Braithwaite

So the big driver there was really the mix of tons. So West Elk was probably 7% to 8% higher than what traditionally was in terms of the total mix. We believe that will kind of solve itself in Q4 as PAMC continues to ratchet up their -- or to ramp up their production. So if you look at where we -- our guidance that we gave this morning on pricing at $59 for the year, that basically implies a $62 to $63 price in Q4. That, again, is a reflection of more PAMC volume, but also being able to capitalize on some of the higher priced volumes that I mentioned earlier. And if you recall, we have about 31.4 million tons of committed volume in the High-CV segment, which isn't even to the bottom range of our guidance. So it gives us some ability to sell some additional tons. So our view is that Q4 should be meaningfully higher in terms of ASP in the High-CV Thermal segment quarter-over-quarter.

Nathan Martin

Got it. And then maybe just one more. I understand it's mining, but I think you've now had a couple of geological challenges in that ICD thermal segment this year. And Jimmy, I know you said you're continually focused on cost containment. So do you think this gives you guys an opportunity to improve cost per ton in '27 for that segment?

James Brock

It certainly does. I mean, if you look where we are, Nate, you've heard me say this many times before, what we try to do is try to stay below the inflationary pressures by picking up efficiencies or running more tons to do that. There are times when you have some of these variabilities. And it is just mining. I mean you'll have these geological conditions where you have sandstone, you have to try to mine under or you'll have some other lower seams or things like that, that cause that. But looking forward, I can tell you, we're off to a great start in Q4. I mean October has been a normal good month for us as we continue to go in Q4 and carry that momentum into 2027, I think we'll have an opportunity to improve on those cost structures in all our segments across it. Q3 has typically been a quarter for us. It's not our best quarter. But I think we're going to come out.

And if you look at our guidance, as Mitesh mentioned a minute ago, we're thinking if you look at the met side, look at the midpoint of the guidance, we should be somewhere around 86 by the midpoint. And then if you look at thermal, we'll try to do exactly the same continuing on cost. It's one of the things that we focus on every single day to look for ways to improve it and overcome some of the inflationary pressures we have.

Operator

Question comes from Chris LaFemina of Jefferies.

Christopher LaFemina

I just want to understand the geological issues that you encountered in Pennsylvania in a little more detail. And what I'm wondering, first of all, is did you know that this was going to be a potential risk in the quarter? Or do you encounter these things sometimes without having knowledge that they're coming? And the reason why I asked that question is because how do you incorporate the risk of geological issues such as these in your forward guidance? I mean I understand that you kind of came out of the tough geology at the end of the quarter and things seem to be going better today. But what gives you confidence that you're not going to enter another difficult pocket in early 2027? And what sort of visibility do you have that these sorts of things are approaching?

James Brock

Very great question, Chris. So we know like when we have a lower seam for an example, we know that because of our Core holes and things we drill. So we'll drop our tons per foot to account for that. Sometimes what we don't know when we talk about geologic variabilities is like if you have an unplanned roof fall that would shut a belt down whereas you carry that out or if you have some sort of sandstone that you typically can't mine under. Unfortunately, for us, 3 of our longwalls encountered that 2 of them were in PAMC in this quarter. We've encountered them before. We've got out of them quickly, but this time took a little longer. And what we try to do is run the remaining longwalls harder to whereas we don't see as much of this in the effect of the production.

However, I will tell you, we had 2 of our PAMC longwalls that encountered these conditions at the same time, which makes it much more difficult. And there's an increase in cost just to provide the tons to get those. So what we know we always plan for, and it is mining. I've been doing this for part of 5 decades. They are things come up that you just can't map. For an example, if we have bad roof conditions somewhere and we know it in time, yes, we can do things to supplement support and get around that. But again, if it's an unplanned fall or something that happens, we're very fortunate no one is hurt, and we just go take care of that, get that longwall back up and operating as quickly as we can and try to overcome all the costs we had associated with it.

Christopher LaFemina

So when we think about what your guidance will be for 2027 and years beyond, should we assume that the risk related to geological challenges is reflected in the guidance already? Or is that the guidance that is basically the possible but not necessarily the probable if you know what you mean? Is there downside risk in the guidance because of potentially be surprised with these sorts of geological issues? How do you think about it in the guidance?

James Brock

No, I don't think you'll see it. What you will see is if we have like all of our projections into 2027, as I said before, the areas where we have the sandstone, we have that all mapped out. Our geologists know that. We'll slow the rates down to account for that. What I can't guarantee you or I don't think anyone can is that we will have something unplanned that happens, some sort of geology that shows up that you just don't know about until you get there with the longwall here, you find it or you have adverse roof conditions that slow down mining rates that you have to go through. But I think we've done a pretty good job in the past and all the years where we've had these things that we pretty much account for what we can. But again, it is mining, and you can get surprises along the way. But in our forecast, we try to take that into account for everything we know and as much as we possibly can.

Mitesh Thakkar

And Chris, just to add to it, as Jimmy said before, too, right, like oftentimes, what ends up happening, we have had these issues in the past. But when you have issue at 1 out of 5 longwalls, the other 4 compensate for it and you don't notice it, right? We meet our numbers, we meet our guidance and move on, right? This one was a little bit unusual in the sense where we had it at multiple locations, right? So it became more prominent, and that's why we are talking about it. But it's general mining variability, right? Like this is mining, not manufacturing. So things happen, but most of the time, given our diversified platform, it doesn't come to Core.

Robert Braithwaite

And Chris, I'd add that we started the year with guidance at $88 to $94. And right now, we're guiding to $89 at the midpoint. So you can see that we expect that sort of natural variability and we build that in. Again, you can see it this year. We've actually reduced from the beginning of the year down to a midpoint of $89.

Operator

Question comes from Matthew Key of Texas Capital.

Matthew Key

A few analysts have already asked about seaborne thermal business. So maybe I'll shift gears to the domestic side. Some softer years for coal burn and natural gas prices are low. How has the demand environment kind of held up in that context? And at a high level, how should we be thinking about total shipments in the PRB as we look out to '27?

Robert Braithwaite

I'd say it's based on geography. In the PJM, I'll say, where we sell most of our PAMC sequel, it's actually been fairly consistent. In fact, I'd say, in recent weeks, we've actually seen a pickup in burn. Power prices are still pretty healthy, albeit very low natural gas prices, sub-3. But I think, again, it just goes to show the electricity demand growth that there is in the PJM.

In terms of most of our customers out West for our PRV product, I mean, you probably noticed we had a significant pickup in volume over 3 million tons quarter-on-quarter, Q2 to Q3. We expect that to remain very consistent as we move throughout Q4 as well. And we're basically looking at a very similar, I'd say, a year-on-year type of sales view for 2027 as we did for 2026. We're sitting here at a very healthy contracted position for 2027, give or take 40 million tons in the PRV today with a lot of opportunities ahead of us. So which gives us some pretty good confidence here that, again, another call it, 48 million to 50 million tons of sales for 2027 is in our future.

Nathan Tucker

Matt, I would just add, look, this is the third year in a row we've had power generation demand nearly 3%. We expect that to continue going forward. Look, so far this year because of low natural gas prices, coal burn is down around 20 million tons, but it was up 40 million tons last year. So still on balance relative to '24, we're on a good trajectory. So we're still feeling positively about that. We continue to see utilities announce investments in their existing coal plants and try to bring out additional electrons from their existing systems. So the story still feels very much intact, even though we've had a dip this year in terms of coal consumption in the U.S.

Matthew Key

Got it. That's super helpful. And I guess I'll ask a pretty broad macro question. But we had the midterms on Tuesday. Could there be any potential impact on your business, either directly or indirectly kind of from the results of that? Obviously, the current administration has been highly supportive of the industry, and they're still in office. But just due to the big shift in the Senate and the House, any kind of moving parts that you think could kind of play out as we progress through the coming months?

James Brock

I think you've heard me say this before. What we try to do is we try to build our company to as we can withstand any administration. We're smart enough to know that they're going to change from election cycle to election cycle. And then also from a political standpoint, we want to be able to withstand all the regulations that come out as well. So I think no doubt about it. We had an administration that was very favorable, and they were openly talking about the benefits of coal. But I still remain really focused on the fact that we're still going to need the power. If it does increase 3% as everyone is projecting it will or 2.5%, as we say, then they're going to have to have all the sources available to meet the power needs. So I still feel really good. Obviously, we'll see what happens here. We won't know until January. And obviously, we have President Trump in for another 2 years. But we'll stay tuned and we'll respond accordingly.

Operator

There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.