U.S. coal production has cancelled out the gain witnessed in CY17, by recording a decline of 3% Y-o-Y in CY18, the US Energy Information Administration said.
The federal agency estimated that US coal production totaled 755 MMst (*Million short tons) in CY18, around 20 MMst less than in 2017 and 36% less than that in the previous decade.
(*1 US Short Ton equals 0.907 Metric Ton)
While the Trump administration had rolled back a range of emissions measures it believed were hampering coal, still production figures in CY18 were only more than a third lower, noted in the past 10 years.
The data is latest sign of the economic challenges that the US coal industry is currently facing, which saw domestic consumption along with production declining in CY18.
It is worth noting that although US coal exports had increased, the volumes were not great enough to offset the fall in the country’s coal consumption, which had resulted in a net decline in coal production.
Region-wise Coal Production:
Of the five major coal-producing basins, two saw increased production in 2018 compared with 2017.
In the Central Appalachian and Illinois Basins, production increased 4% (by 3 MMst) and 2% (by 2 MMst), respectively.
The Rocky Mountain region experienced the largest decline as a share of production, 12% (6 MMst) lower than in 2017. Coal output from the Powder River and Northern Appalachian Basins also declined by 3% and 2%, respectively.
Annual Coal Consumption:
EIA estimated that total coal consumption in the United States was 692 MMst in 2018, falling to the lowest level in 39 years.
Power sector had accounted for more than 90% of the total consumption, wherein the retirement of 15 GW coal fired capacity had contributed to the decline in coal consumption.
Although natural gas prices continued to rise in 2018, the share of coal in total power generation declined, reaching a new low of 28%, lower than the natural gas share (35%) for the third consecutive year.
Increasing coal prices and demand for coal exports, along with continued competition with natural gas, also contributed to a decline in overall coal consumption.
US Coal Prices:
The average price of U.S. steam coal used in electricity generation increased in 2018 in most regions.
The price of Northern and Central Appalachian coal, driven by strong international demand for both metallurgical and steam coal, increased by 41% and 39% in 2018, respectively.
Illinois Basin coal prices also rose, climbing 19%.
While Power River Basin and Rocky Mountain prices fell by 2% and 3%, respectively.
US Coal Exports:
Coal exports rose for the second consecutive year in 2018, reaching 116 MMst, or 15% of total U.S. coal production.
International demand for US coal was driven by Asian and European countries.
The largest importers of US coal in Asia were India, Japan, and South Korea.
In Europe, the Netherlands emerged as the preferred destination for US coal, followed by Turkey, Morocco, Croatia, and the United Kingdom.
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