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S&P: U.S. coal exports fell sharply in fourth quarter of 2019 from year-earlier level

February 19, 2020

S&P Global Market Intelligence ($):

While all four major U.S. coal ports took a beating in terms of fourth-quarter 2019 tonnage year over year, producers in the Illinois Basin saw an enormous drop in exports. Coal from the region is primarily shipped through the port in New Orleans.

The U.S. exported an aggregate 18.8 million tonnes of coal during the recent quarter, decreasing 28.1% from the comparable 2018 period, according to data compiled by S&P Global Market Intelligence. Weaker international thermal and metallurgical coal prices hindered U.S. producers in 2019, with prices falling to a level at which many miners could no longer compete, experts said. While the year-over-year drop was significant, exports sank only 6.5% from the third to the fourth quarter of 2019.

The Illinois Basin had an especially strong 2018 for exports amid solid international thermal coal demand, but exports through New Orleans fell from 5 million tonnes a year prior to nearly 2.1 million tonnes in the fourth quarter of 2019, a 58.7% drop year over year.

While the fourth quarter of 2019 looked dismal for the port year over year, it was an improvement from the third quarter, with exports increasing about 9.4%. Some of the major players in the region have struggled financially, especially in the last few months. Murray Energy Corp. filed for bankruptcy protection in October 2019, while Foresight Energy LP, which Murray controls, faces financial difficulties and continues to negotiate with debt holders.

The Institute for Energy Economics and Financial Analysis predicted in a December 2019 report that most of the basin’s coal industry will be gone in the next two decades amid coal plant retirements. “Just in the past year, producers have closed or idled mines that produced almost nine million tons of coal in 2018,” according to the report. “Further closures are likely, both in the near- and long-term. The Illinois Basin will clearly be hit hard economically by the structural decline of the region’s coal industry.”

[Ellie Potter]

More ($): U.S. coal exports fell 28.1% YOY in Q4’19; Illinois Basin sees 58.7% decline

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