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In-brief analysis
January 29, 2024

U.S. coal exports account for larger share of a shrinking market

total annual consumption of U.S. coal by end-sector
Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), January 2024, and U.S. Census Bureau data

As domestic consumption of U.S. coal declines in the near term, we expect exports to account for a larger share of total U.S. coal consumption, according to our recently released Short-Term Energy Outlook (STEO). We expect U.S. coal consumption will total 482 million short tons (MMst) in 2024, 29% less than in 2019. We expect that exports will make up 19% of total demand in 2024 and 21% in 2025, up from a share of 14% in 2019 because of decreasing domestic consumption, especially from the electric power sector.

We expect that the U.S. electric power sector will consume 73% of U.S. coal in 2024 and 70% in 2025, down from 79% in 2019. In 2019, the U.S. electric power sector consumed 539 MMst of coal, while exports totaled 94 MMst. Coal consumption declined substantially across all sectors in the pandemic year of 2020 and then returned to pre-pandemic levels in 2021.

Despite the brief increase, total U.S. coal consumption has since continued to decline, dropping to 601 MMst in 2022 and 524 MMst in 2023, as consumption declined in the electric power sector. We expect that electric power consumption will decline to 352 MMst in 2024 and 322 MMst in 2025. We estimate U.S. exports increased to 100 MMst in 2023, based on January through October data. We expect exports fall to 91 MMst in 2024 and rise again to 95 MMst in 2025.

The pickup in exports reflects more demand for U.S. coal in foreign markets, especially in Asia where coal consumption was on track to hit record levels in 2023. This increase in demand for U.S. coal is primarily for thermal coal in Europe and Asia, where U.S. coal exporters have grabbed a small share of the growing market. Demand for U.S. coal increased following ongoing embargoes of Russia’s coal in several markets. Demand for U.S. metallurgical coal tends to remain steady in overseas markets given its high quality for blast furnace coking.

We expect total coal consumption to fall to 457 MMst in 2025 because of lower electric power consumption. We forecast that other sectors in the market for U.S. coal consumption will remain marginal or relatively stable.

Principal contributor: Jonathan Church