Despite this macro headwind on pricing, Ramaco’s fourth quarter results were our strongest operational and financial quarter of the year. In simple terms, we did very well in those areas we could control. We succeeded in both reducing costs and increasing sales for the third consecutive quarter. We anticipate the same positive operational progress in 2025, excluding results from the Q1 weather events. We are extremely proud of both our operations and sales teams for the work they have performed.
The Company also enjoyed its strongest quarter of the year in terms of both Adjusted EBITDA and sales. This was despite the fourth quarter being the weakest quarter of 2024 in terms of metallurgical coal price indices. We achieved record quarterly tons sold of more than 1.1 million tons, as well as the lowest quarterly cash costs of the year. Cash cost per ton sold declined quarterly by $6 per ton in the fourth quarter of 2024 to $96 per ton, which was $22 per ton below first quarter of 2024 cash costs.
As a result of this solid operational performance, fourth quarter of 2024 margins per ton sold remained at $33 per ton, down just $1 per ton from the third quarter, and down just $2 per ton from the second quarter of 2024. Based on these results, we believe our cash margins were almost 50% higher than the next highest Central Appalachian public peer for the average of both the third and fourth quarters of 2024.
As we survey the macro met coal markets for 2025, we believe that while overall steel demand remains weak in the near term, there are reasons to expect prices may increase over the course of 2025, especially in the second half of the year.
Anecdotally, on the supply side we believe that U.S. production of metallurgical coal in the first quarter of 2025 is likely to have declined by 14 million tons on an annualized basis from the 2024 peak. We believe in 2025 that an additional 5 million or more tons of production will either shut down or is at risk of shutting down absent a meaningful upward move in pricing. This is principally due to large negative cash margins in the case of higher cost producers, which has led to a number of recent announced bankruptcies in the space. More may follow. In addition, there have been two large longwall mines that experienced an ignition event that have caused those mines to now be offline for extended periods.
Also, in January we noticed an increase in inbound export customer interest for spot met coal availability. This was primarily due to increased demand for coking coal in Ukraine, stemming from the likely permanent outage of the country’s only domestic met coal mine. In addition, a large Polish mine had an ignition event around the same time. The aggregate impact of both these domestic and international supply-side factors has created a general tightening of supply in the U.S.
As we move forward into the year, we also expect to see increased domestic idling associated with lower quality high vol production typically destined for Asian markets. Netback economics at today’s prevailing prices are prohibitive for these mostly higher cost operations. As a result, we doubt that some producers will renew 100% of their previous Asian contract business, a significant portion of which would begin in April. We believe that as a result another round of supply cuts could occur around that timeframe absent a significant upward movement in pricing.
In terms of Pacific basin supply, Australian producers are having a difficult start of the year, having some of the lowest volumes shipped from Queensland in at least 6 years. This has not triggered any near-term upward movement in prices. However, if the situation persists, end-user shortages will eventually create incremental spot demand. This could potentially create upward price pressure in the coming months.
On the demand side, the world is closely watching the new Trump Administration and the potential for additional tariffs on steel imports. Based on our analysis, we believe there is roughly 2 – 3 million tons of potential upward incremental domestic metallurgical coal demand if new tariffs were to limit steel imports, causing domestic blast furnaces in turn ramp up steel production.
Regarding our balance sheet, we have been able to maintain record amounts of liquidity which was almost $140 million at year end. We regard this posture as both defensive as well as offensive. We hope to perhaps increase market share in an unsettled market. We are also poised to execute on opportunities as they might present themselves in an overall distressed market environment.
