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Short-Term Energy Outlook

Release Date: July 10, 2018  |  Next Release Date: August 7, 2018  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Coal

Coal Supply. EIA estimates that coal production declined by 9 million short tons (MMst) (2%) in the first half of 2018 compared with the same period in 2017, despite an increase in U.S. coal exports over the same period. Overall in 2018, U.S. coal production is expected to total 773 MMst, nearly unchanged from 2017 levels. Western region coal production is expected to rise by 3 MMst to 433 MMst, and Interior region coal production is forecast to rise by 7 MMst to 153 MMst. Growth in those regions is offset by a forecast decline of 11 MMst (to 187 MMst) in Appalachia region coal production in 2018. In 2019, total U.S. coal production is expected to decline by 27 MMst (3%), as both exports and domestic consumption are expected to decline.

U.S. coal production

U.S. electric power sector coal stocks

Coal Consumption. EIA estimates that coal consumption in the electric power sector for the first half of 2018 declined by 13 MMst (4%) compared with the same period in 2017, despite increases in overall electricity generation. Coal consumption in the electric power sector is forecast to decrease by 24 MMst (4%) for all of 2018 and by 30 MMst (5%) in 2019. The decrease in power sector consumption reflects increased electricity generation from natural gas and renewable energy sources and the recent closure of coal-fired power plants.

U.S. coal consumption

Coal Trade. The United States, with excess coal production and export terminal capacity, is a swing supplier of coal in the global market. When market conditions are favorable (high global coal prices, low shipping costs, disruptions in supply from other exporters, and/or increased demand from major consumers), U.S. coal exports often expand. However, exports often contract with a reversal of these market factors. U.S. coal exports through the first four months of 2018 were 30% higher than in the same period of 2017, and the 11 MMst exported in April was the most exported in any month since in March 2013 when almost 14 MMst were exported. EIA forecasts total coal exports to be 104 MMst in 2018 and 99 MMst in 2019.

U.S. coal exports to Asia, particularly to India, remain strong. Exports to India for the first four months of 2018 were almost 7 MMst, up from 3 MMst in the first quarter of 2017. In 2016, exports to India for the whole year totaled 6 MMst.

Several factors could keep exports to India high in the near term. Increased electricity demand, combined with lower hydro generation, has led India’s power ministry to recommend that state governments and private power companies import coal. India’s domestic coal production is currently unable to meet the growing demand in the power sector. India is also proposing a national ban on using petroleum coke as a fuel. The proposal follows a ban ordered by India’s Supreme Court last October on burning petroleum coke in the region around New Delhi. The new ban would still allow petroleum coke to be used in the limestone and cement industries. However, these factors supporting coal exports are expected to diminish.

Coal Prices. EIA estimates the delivered coal price to U.S. electricity generators averaged $2.08 per million British thermal units (MMBtu) in 2017, which was 4 cents/MMBtu lower than the 2016 price. EIA forecasts that coal prices will be $2.10/MMBtu in 2018 and $2.09/MMBtu in 2019.

U.S. Coal Summary
  2016201720182019
Prices (dollars per million Btu)
Electric Power Sector 2.112.082.102.09
Supply (million short tons)
U.S. Coal Production 728.4774.1773.2746.2
Imports 9.87.88.19.3
Exports 60.397.0104.098.7
Consumption (million short tons)
Electric Power Sector 678.6664.7641.0611.3
Other Sectors 52.552.250.550.3
Total Consumption 731.1717.0691.6661.6
End of Period Inventories (million short tons)
Electric Power Sector 162.0137.2117.6118.1
Total Inventories 193.0163.5144.2148.9

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