Warrior Met Coal's Q2 2025: Key Contradictions in Production Outlook, Costs, and Market Dynamics

Production and sales volume outlook, impact of longwall construction on costs, sales realization and market conditions, sales volume expectations, and sales by geography and market diversification are the key contradictions discussed in Warrior Met Coal's latest 2025Q2 earnings call.



Market Challenges and Price Trends:
- Warrior Met Coal's average premium low-vol steelmaking coal index prices declined 24% compared to the second quarter last year and 33% year-over-year through June.
- The price decline is attributed to excess Chinese steel exports, weak global steel demand, and increased supply from second-tier segments.

Operational Performance and Sales Volume:
- The company's second-quarter sales volume increased by 6% year-over-year, reaching 2.2 million short tons.
- This growth was driven by early sales from the Blue Creek mine, which were ahead of schedule.

Cost Control and Efficiency:
- Warrior achieved a cash cost of sales per short ton FOB port of approximately $101 in Q2 2025, down from $124 in Q2 2024.
- The decrease was due to lower variable transportation and royalty costs, tightly managing overall spending, and initial sales of low-cost Blue Creek tons.

Financial Results and Impact of Blue Creek:
- Warrior reported adjusted EBITDA of $54 million in Q2 2025, down from $116 million in the same quarter last year.
- Despite the decline, Blue Creek's early sales and better cost structure positively impacted the quarter's financial performance.

Blue Creek Project Milestones and Outlook:
- The longwall startup at the Blue Creek mine was accelerated to early first quarter 2026, ahead of schedule.
- The project remains on budget, with total capital expenditures to date at $823 million and a total project estimate ranging from $995 million to $1.075 billion.