Joseph Craft, the company’s president and CEO, delivered that message to analysts during a January 26 conference call to discuss Alliance’s fourth quarter 2015 and full-year earnings.

As usual, Alliance had another good year. It posted net income of $306 million before taxes for the 12 months, but saw income dip to $21.5 million in the fourth quarter, an 82.6% decrease, as the company felt the impact of lower coal prices and reduced sales, reflecting a deferral in shipments by some electric utility customers.

Alliance produced 41.2 million tons and sold 40.2 million tons last year, or 1.1% and 1.3% more than in 2014, respectively.

Because of the market’s continued softness, Alliance has ratcheted back planned 2016 production to a range of 33.7 million and 35.7 million tons. It expects sales to range between 34.6 million and 38.1 million tons.

Part of the decrease is the impending closure of the Elk Creek underground mine near Madisonville, Kentucky, operated by the company’s Hopkins County Coal subsidiary. High-sulfur coal reserves at Elk Creek, a big producer for years, have played out, and the mine is expected to shut down by the end of March. Alliance recently placed its Gibson North underground mine in Gibson County, Indiana, and Onton underground mine in Hopkins County on “hot idle.” Craft said he hopes both will resume production later this year, although that is far from certain.

Even its River View near Uniontown in Union County, Kentucky, is being affected. River View, one of the largest underground mines in the ILB, produced 9.1 million tons in 2015, down slightly from 9.3 million tons in 2014, according to the federal Mine Safety and Health Administration (MSHA). For now, however, Alliance has shelved a previous plan to boost production even more at River View, Craft said.

“Conditions in the U.S. thermal coal markets continued to deteriorate during the 2015 quarter as mild weather reduced overall power demand,” he said. “Utilities responded by delaying contracted tons and adding to their already above normal coal stockpiles.”

Looking ahead, Alliance believes 2016 coal demand for its ILB and NAPP markets will be 6% and 7%, below 2015, respectively, depending on the weather, he said. As a result, the company is uncertain whether utilities “will satisfy this demand by reducing inventories or taking advantage of current low spot prices and purchase coal to match their coal burn.”

Craft said coal supply in 2016 is likely to be close to 800 million tons in the U.S. In Alliance’s primary markets, the ILB and NAPP, supply was about 53 million tons in the October-December period, or about 212 million tons on an annual basis. “We expect 2016 coal demand to be about 215 million tons, which is 20 million tons below 2015 levels.”

In the fourth quarter, Alliance actually sold 1.5% more coal, 7.8 million tons, in the ILB than the 7.6 million tons it sold a year earlier. But sales in NAPP and Central Appalachia were 2.1 million tons, down 8.3% from 2.3 million tons in the fourth quarter of 2014.

Alliance has had some recent success in adding to its long-term sales book. Since its third quarter earnings release in October, the company has contracted for an additional 7.5 million tons at an average price of $41.73/ton. Thus far, the company has secured coal sales of about 19.1 million tons, 14.5 million tons and 7.1 million tons for 2017, 2018 and 2019, respectively, and Craft said he expects those figures to increase by the end of the second quarter this year.