Help Desk -
9958816305, 9810335381
Email
Password

US Coal Mine Closures & Bankruptcies Likely as Coronavirus Pandemic Spreads

Coal News - Published on Mon, 30 Mar 2020

Image Source: US Coal Mining Coronavirus Lockdown
Moody's Investor Services expects further closures and bankruptcies within the US coal industry as demand declines significantly and environmental, social and governance concerns becomes stronger. Moody’s said "The combination of weak power fundamentals, challenging capital market conditions, and increasing concern about ESG will likely push a significant amount of coal capacity into bankruptcies and lead to new closure announcements over the next year or two.”

Moody's expects domestic demand for thermal coal to decline in the near-term as much of the industrial economy is shut down in order to try and slow the coronavirus pandemic and as slower economic activity cuts down US electricity demand. It said "Before the intensification of the coronavirus pandemic in the US, we expected that coal production would fall by15%-20% in the US, to about 550 million st-600 million st. We now expect that the industry conditions will worsen beyond this forecast" as demand weakens for electricity in the commercial and industrial markets.”

Moody’s added "Export thermal markets will continue to fall in 2020, rather than helping rescue domestic thermal coal producers from weakening domestic demand like in 2017 and 2018. While some producers still have contracts established during stronger market conditions, and cash costs vary significantly for each mining operation, coal pricing in Europe will not support a continuation of US exports at 2019 levels, which were themselves down 20% from 2018 levels."

Source :

Posted By : Yogender Pancholi on Mon, 30 Mar 2020
Related News from Coal segment