November 1, 2018 Read More →

Data show no big turnaround for coal production, employment

S&P Global Market Intelligence ($):

President Donald Trump is touting his efforts to aid the U.S. coal sector as he supports his party’s midterm election candidates, but the latest data shows that coal volume and coal jobs have remained fairly flat over the past two years as strong export markets have been offset by an ongoing structural decline in domestic demand.

Among U.S. coal producers reporting third-quarter data, output rose 7.3% to 194.0 million tons, the first quarter-over-quarter increase in coal production in a year. Average coal mining employment at the same mines, as reported to the U.S. Mine Safety and Health Administration by mine operators, fell by just under 1% quarter over quarter.

U.S. average coal mining jobs had been declining for years but took a steep dive in 2015 and the early months of 2016 to match rapidly declining coal production and demand from U.S. utilities. After reaching a low of 50,571 workers in the third quarter of 2016, average employment bounced slightly up in the second half of 2016 and into the first half of 2017 as international demand began to improve, but it has stayed relatively flat ever since.

Third-quarter coal production at the reporting mines was the highest since the third quarter of 2017. Prior to the most recent quarter, coal production had declined three quarters in a row.

Whether production continues to increase in the Powder River Basin could largely depend on how high electricity demand goes this winter. While natural gas prices have risen to levels more favorable for coal demand, Cloud Peak Energy Inc. and Arch Coal Inc. executives commented on recent earnings calls that domestic utility buying activity has remained tepid.

More ($): Coal production, jobs data belie Trump claims of ‘vibrant’ sector

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