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EIA: U.S. coal consumption to drop below 600 million tons this year

October 09, 2019

S&P Global Market Intelligence ($):

The U.S. Energy Information Administration is forecasting a 17% decline in fourth-quarter coal production from the year-ago period.

According to its latest “Short-Term Energy Outlook,” the EIA expects total U.S. coal production to sink to 159 million tons in the final three months of the year, a decline of 34 million tons from the fourth quarter of 2018. Declining coal demand, bankruptcies, ownership changes and mine closures have “contributed to a fluctuating production environment” in the western coal region, especially in the Powder River Basin, according to the report.

This year’s coal production is expected to total 679.3 million tons, an increase from the administration’s September projection of 673.9 million tons. But the EIA’s 2020 production outlook fell from 617.3 million tons in September to 603 million tons in October.

For 2019, Western coal producers are forecast to see the largest percentage decrease in output from 2018, with an 11.6% reduction to 369.7 million tons. Miners in the interior region are expected to produce 8.5% less coal, totaling 125.5 million tons, and Appalachian producers are expected to see a 7.9% drop to 184.2 million tons.

EIA’s report also includes a 12% decline in 2020 coal exports from its September forecast. The administration projected that coal exports will total 75 million tons, a 10 million-ton reduction due to declining demand in the Atlantic Basin, a surplus of Eastern European coal supply and a lack of West Coast coal terminal capacity to reach the Asian markets. This year, it expects U.S. producers to export 91.8 million tons of coal, an even starker outlook from the 94.2 million tons projected in September.

Coal consumption is expected to drop to 596 million tons this year and then to 544 million tons in 2020.

More ($): EIA projects 17% YOY coal output decline in Q4 amid bankruptcies, falling demand

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