While there has been modest recovery in demand, steel capacity utilization remains low at approximately 59%, and it is difficult to predict when demand will fully return to normal levels.
In 2020, we will reduce our production by approximately 550,000 tons and now expect to produce approximately 3,750,000 tons for the whole year.
The impact of these actions coupled with lower volumes will result in a reduction of 2020 adjusted EBITDA of $40 million to $50 million from our previous guidance.
We now expect 2020 adjusted EBITDA to be between $190 million and $200 million.
We anticipate that these initiatives will result in permanent annual savings of approximately $10 million beginning in 2021.
Domestic demand for foundry coke is approximately 600,000 tons per year.
There are more than 30 foundry coke customers across the country and numerous related industrial coke customers.
Our initial target is to produce approximately 100,000 tons of foundry coke in 2021.
We're making capital investments of approximately $12 million on coal grinding, material handling, coke screening and laboratory equipment, all of which is necessary to meet market demands.
As you can see on Slide 5, diluted earnings per share was $0.08 per share in the second quarter of 2020 compared to $0.03 per share in the second quarter of 2019.
Looking at adjusted EBITDA, this came in at $59 million in the second quarter of 2020 versus $63.1 million in the second quarter of 2019.
Adjusted EBITDA from the coke operations increased $4.2 million compared to the prior year.
Domestic sales volumes were approximately 54,000 tons lower than the prior year due to customer turn downs.
The adjusted EBITDA contribution from the Logistics segment decreased approximately $9 million versus the second quarter of 2019.
Throughput volumes at CMT and the domestic terminals were approximately 2.7 million tons lower versus the prior year period.
Once again, coke operations were favorable by $4.2 million, driven by strong cost control and favorable cost recovery.
Logistics operations were lower $8.8 million quarter-over-quarter, mainly due to Foresight and Mercury bankruptcies.
Corporate and Other was better by $0.5 million.
Moving on to the next slide, you can see in the chart that our cash balance at the end of the quarter was approximately $81 million, which is a more normalized cash balance.
Our cash at the beginning of the quarter was artificially high because the company increased its borrowing under its revolving credit facility by approximately $157 million in order to preserve financial flexibility.
In the quarter, cash flow from operations generated $21.8 million and we had capex of $14.1 million.
Additionally, we paid $0.06 per share dividend in the quarter, which was a use of cash of $5 million.
At the end of the quarter, on an LTM basis, our gross leverage was 3.3 times and our net leverage was 2.96 times.
Using the midpoint of our new adjusted EBITDA guidance range, our year end net leverage would be 3.65 times, which is well within our leverage covenant.
Over time as market stabilizes, we intend to resume executing on our long-term capital allocation priorities with the primary focus on reducing gross leverage to 3 times or lower.
We sold 977,000 tons of coke in the quarter.
Q2 2020 adjusted EBITDA per ton was approximately $63 compared to $55 per ton in Q2 of 2019 with the per ton increase driven by favorable cost recovery and strong cost management.
Looking at domestic coke on a full year basis, we now expect domestic coke to generate between $198 million and $202 million of adjusted EBITDA in 2020 on 3,750,000 tons of production.
This is approximately $45 million lower than our previous adjusted EBITDA guidance, and production is estimated to be 550,000 tons lower.
The domestic terminal handle [Technical Issue] million tons in Q2 2020 versus 3.6 million tons in Q2 of 2019 and 2.9 million tons in Q1 of 2020.
CMT had throughput volumes of 704,000 tons, which is lower than the first quarter and lower than our original guidance.
And again, we'll look to be at the lower end of our original guidance in the Logistics segment at $17 million.
We now expect adjusted EBITDA to be between $190 million and $200 million.
Our capital expenditures are estimated to be approximately $80 million, which now includes $12 million of capital for foundry coke.
We now anticipate that free cash flow will be between $36 million and $52 million in 2020.

Summary:
We now expect 2020 adjusted EBITDA to be between $190 million and $200 million.
We anticipate that these initiatives will result in permanent annual savings of approximately $10 million beginning in 2021.
As you can see on Slide 5, diluted earnings per share was $0.08 per share in the second quarter of 2020 compared to $0.03 per share in the second quarter of 2019.
We now expect adjusted EBITDA to be between $190 million and $200 million.