February 5, 2018 Read More →

U.S. Coal CEO Sees No Domestic Market Growth

S&P Global Market Intelligence:

Two weeks after announcing an export deal to supply two new integrated coal gasification combined-cycle coal-fired power plants in Japan, Cloud Peak Energy Inc. CEO Colin Marshall told S&P Global Market Intelligence that the global market offers the only room for real growth as domestic demand for thermal coal levels out.

Speaking on the sidelines of the Coaltrans 2018 conference in Miami, Marshall said the deal, completed though subsidiary Cloud Peak Energy Logistics, helped put the company’s export volume on the way to 10% of total production, after declining to virtually zero in 2016.

Echoing a number of U.S. coal producers in recent months, Marshall said Cloud Peak has looked to higher prices abroad for relief as domestic demand for thermal coal continues to wane, despite strong support from the Trump administration.

While most of those producers finding opportunities in the export market have been metallurgical coal producers in eastern states, Cloud Peak in the Powder River Basin has sought out options in Asia, mostly among countries still pursuing new coal-fired power plants.

“We’ve seen it for a long time as the only growth market that we’re facing,” Marshall said. “The actual story playing out in Asia, with Indonesian coal — the quality seems to be dipping and more is being used domestically, with South Korea building lots of power plants, and their coal consumption has gone up 20% — where else in the world is that going on?”

More ($): Cloud Peak CEO finds exports only option for growth as US coal market calms

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