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Expectations flat for US coal exports, production heading into 2019 - Seaport Global

Coal News - Published on Fri, 11 Jan 2019

Image Source: Dry Cargo International
Total US thermal and metallurgical coal exports and production are projected to remain relatively flat in 2019 compared with 2018 levels, according to a report by Seaport Global analysts released. Seaport Global’s Mark Levin, senior analyst, and Nathan Martin, senior associate analyst, project US coal production to total 760 million tons in 2019 compared with an estimated production of 758 million tons in 2018.

Expectations for higher 2019 Powder River Basin production fell as natural gas prices have once again fallen below USD 3/MMBtu; although utility stockpiles do remain at historic lows.

The analysts wrote that “In short, we think it would take a nasty next few months of weather to change the trajectory of PRB coal prices.”

Higher production is not expected unless PRB prices increase. But with the known level of uncontracted and unpriced volume for 2019 prices are being kept unchanged, aided by intra-basin competition and excess regional production capacity.

Arch and Cloud Peak, leading PRB producers, had approximately 36 million tons and 26 million tons, respectively, of coal left to price by the end of Q3 2018.

Levin and Martin project Utah and Colorado production to drop with coal plant retirements, along with drops in Central and Northern Appalachian production.

Only production in the Illinois Basin is projected to increase with several producers adding capacity to mines or beginning production at new mines.

Total exports in 2019 are projected to total approximately 113 million tons, down from 2018 export expectations of 116 million tons, mostly due to an anticipated drop in thermal coal exports.

While thermal coal exports are projected to total 54 million tons in 2018, up 30% year on year and at their highest level since 2013, in 2019 Seaport projects a 5% fall to 51 million tons.

The growth in 2018 has led to US producers being able to “lock in” volumes for 2019, supporting this year’s export market.

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Posted By : Rabi Wangkhem on Fri, 11 Jan 2019
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