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Released April 18, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. Energy Information Administration (EIA) recently boosted its forecast for U.S. coal exports this year, citing rising international prices driven by Russia's invasion of Ukraine.
In its April Short-Term Energy Outlook (STEO), the EIA forecasted U.S. coal exports to total 89 million short tons in 2022, up 4% from 2021. This compares with its March forecast of 88 million short tons this year, a 3% increase.
On April 8, the European Commission agreed to a new package of restrictive measures against Russia, including an import ban on all forms of Russian coal. This affects one-fourth of all Russian coal exports, amounting to about 8 billion euro (US$8.7 billion) billion loss of revenue per year for Russia.
"We assume international prices will continue to drive increasing U.S. coal exports as the conflict in Ukraine creates the potential to disrupt supplies from Russia," the April STEO said.
"However, exports to Asia, and particularly China, which supported U.S. coal exports in 2021 have slowed in 1Q22," the April report cautioned. "We also assume transportation and terminal capacity constraints will limit exports in the forecast."
The April report also included a significant increase in the forecast for U.S. coal production this year. The latest outlook report forecasted U.S. coal production will increase by 43 million short tons (7%) in 2022 to 621 million short tons. In comparison, the March STEO forecasted U.S. coal production would increase by only 25 million short tons this year to 604 million short tons.
"We expect production in the Western region to drive the increases," according to the April STEO. "Additional coal production will help refill electric sector inventories that were depleted during 2021."
The EIA reversed its forecast for U.S. coal consumption this year, from a decrease to an increase. The agency said in the April STEO it expected U.S. coal consumption to increase by 14 million short tons in 2022, due to higher natural gas prices. In contrast, the March STEO forecasted U.S. coal consumption to decrease by 7 million short tons this year due to declining consumption from the electric power sector.
Coal consumption is expected to decrease by 32 million short tons in 2023 as natural gas prices decline, according to the April STEO. On the other hand, "We expect coke plant consumption to fall by 10% in 2022 but increase next year back to 2021 levels."
U.S. coal producers were doing relatively well even before the Ukraine conflict broke out. Peabody Energy (NYSE:BTU) (St. Louis, Missouri) reported on February 10 that its fourth-quarter 2021 revenues surged 72% to $1.26 billion from the prior year. Net income attributable to common stockholders was $513 million. Full-year 2021 revenues totaled nearly $3.32 billion compared with $2.88 billion in the prior year, primarily due to improved seaborne pricing in the second half of the year, the company said.
Industrial Info is tracking more than $4.8 billion in U.S. project activity tied to the mining of bituminous coal and anthracite. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of detailed reports.
The most expensive of these projects is Warrior Met Coal Limited Liability Company's (NYSE:HCC) (Brookwood, Alabama) $500 million Blue Creek No. 1 Underground Metallurgical Coal Mine near Berry, Alabama. Mine site preparation and project development were delayed last year due to COVID-19 but were planned to resume this year. The Blue Creek development will be a single longwall mine and is expected to have the capacity to produce an average of 4.3 million short tons per year of metallurgical coal over the first ten years of production, according to the company. Subscribers can click here for the related project reports.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
In its April Short-Term Energy Outlook (STEO), the EIA forecasted U.S. coal exports to total 89 million short tons in 2022, up 4% from 2021. This compares with its March forecast of 88 million short tons this year, a 3% increase.
On April 8, the European Commission agreed to a new package of restrictive measures against Russia, including an import ban on all forms of Russian coal. This affects one-fourth of all Russian coal exports, amounting to about 8 billion euro (US$8.7 billion) billion loss of revenue per year for Russia.
"We assume international prices will continue to drive increasing U.S. coal exports as the conflict in Ukraine creates the potential to disrupt supplies from Russia," the April STEO said.
"However, exports to Asia, and particularly China, which supported U.S. coal exports in 2021 have slowed in 1Q22," the April report cautioned. "We also assume transportation and terminal capacity constraints will limit exports in the forecast."
The April report also included a significant increase in the forecast for U.S. coal production this year. The latest outlook report forecasted U.S. coal production will increase by 43 million short tons (7%) in 2022 to 621 million short tons. In comparison, the March STEO forecasted U.S. coal production would increase by only 25 million short tons this year to 604 million short tons.
"We expect production in the Western region to drive the increases," according to the April STEO. "Additional coal production will help refill electric sector inventories that were depleted during 2021."
The EIA reversed its forecast for U.S. coal consumption this year, from a decrease to an increase. The agency said in the April STEO it expected U.S. coal consumption to increase by 14 million short tons in 2022, due to higher natural gas prices. In contrast, the March STEO forecasted U.S. coal consumption to decrease by 7 million short tons this year due to declining consumption from the electric power sector.
Coal consumption is expected to decrease by 32 million short tons in 2023 as natural gas prices decline, according to the April STEO. On the other hand, "We expect coke plant consumption to fall by 10% in 2022 but increase next year back to 2021 levels."
U.S. coal producers were doing relatively well even before the Ukraine conflict broke out. Peabody Energy (NYSE:BTU) (St. Louis, Missouri) reported on February 10 that its fourth-quarter 2021 revenues surged 72% to $1.26 billion from the prior year. Net income attributable to common stockholders was $513 million. Full-year 2021 revenues totaled nearly $3.32 billion compared with $2.88 billion in the prior year, primarily due to improved seaborne pricing in the second half of the year, the company said.
Industrial Info is tracking more than $4.8 billion in U.S. project activity tied to the mining of bituminous coal and anthracite. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of detailed reports.
The most expensive of these projects is Warrior Met Coal Limited Liability Company's (NYSE:HCC) (Brookwood, Alabama) $500 million Blue Creek No. 1 Underground Metallurgical Coal Mine near Berry, Alabama. Mine site preparation and project development were delayed last year due to COVID-19 but were planned to resume this year. The Blue Creek development will be a single longwall mine and is expected to have the capacity to produce an average of 4.3 million short tons per year of metallurgical coal over the first ten years of production, according to the company. Subscribers can click here for the related project reports.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
