With its combined 229 BMT of combined bituminous and subbituminous coal (end-2013), the United States is the world’s second-largest coal producer. Yet it accounted for only 2% of global steam coal exports (22MMT) in 2015. IHS Markit expects this percentage will drop even further by 2040, with the United States playing a minor role in supplying growing Asian demand.
U.S. coal suppliers – while sitting on abundant reserves – lack export competitiveness for a multiplicity of reasons. The country’s subbituminous coal reserves, which sit mainly in the Powder River Basin (PRB), cannot compete with Indonesian exports, which benefit from the rupiah’s lower value relative to the dollar. IHS Markit expects U.S. subbituminous exports will drop through the decade and that any growth would stem from plants in Asia wishing to reduce their dependency on Russia and Indonesia. U.S. bituminous coal is located in four key basins: Northern Appalachia, Central/Southern Appalachia, Illinois Basin and Western Utah/Colorado. Of these, only Northern Appalachia poses some export potential for met coal, while only the Illinois Basin – once the great hope for steam coal exports – harbors a glimmer of hope for future thermal coal exports. Recently, Illinois Basin suppliers have suffered from the combination of an appreciated U.S. dollar and rivalry from petcoke.
In addition to a challenging export future, U.S. coal suppliers face an uphill battle at home. Stringent domestic regulation – notably the Environmental Protection Agency’s Clean Power Plan, which is set to kick in by 2022 – along with competing low gas prices, environmental group opposition, the utilities inability to cut inventory, and tax incentives for renewables paint a depressed outlook for U.S. coal for the foreseeable future. IHS Markit coal director Jim Thompson has described the drop in U.S. coal production, down 32.3% from a comparable period in 2015, as the most remarkable production adjustment in the history of the U.S. coal industry. With most of the large publicly traded coal companies having declared bankruptcy, industry rationalization and reorganization will continue apace. IHS Markit is tracking how the industry as a whole is responding to this restructuring and which companies and coal regions will be well situated to capitalize on any market rebound.
You can find the U.S. coal market data, news and insight through the Coal and Energy Price Report and the U.S. Coal Review. Available through our North American Coal Market News & Analysis service, these two reports provide:
- Key price indices:.
- U.S. East Coast FOB (6,000kc NAR)
- U.S. Gulf High Sulphur FOB (6,000kc NAR)
- U.S. Coal (Nymex/PRB/N.App/Illinois Basin), Rail, Crude, Natural Gas (Henry Hub) and emissions pricing – updated every day
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- Key physical prices (Colombian)
- U.S. import and export statistics for metallurgical, steam and petcoke
- U.S. production and consumption data for metallurgical, steam and petcoke
- Analysis of major producers, producing regions, transportation costs, infrastructure, policy
- Analysis of the latest U.S. coal market news: briefs, tenders, stocks, contracts
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