The Coal Trader

US coal exports account for larger share of a shrinking market

As domestic consumption of US coal declines in the near term, the US Energy Information Administration expects exports to account for a larger share of total US coal consumption, according to its recently released Short-Term Energy Outlook (STEO).

The EIA expects US coal consumption will total 482 million short tonnes (st) in 2024, 29% less than in 2019. 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.

The US electric power sector is expected to consume 73% of US coal in 2024 and 70% in 2025, down from 79% in 2019. In 2019, the US electric power sector consumed 539 million t of coal, while exports totalled 94 million st. 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 US coal consumption has since continued to decline, dropping to 601 million st in 2022 and 524 million st in 2023, as consumption declined in the electric power sector. The EIA expects that electric power consumption will decline to 352 million st in 2024 and 322 million st in 2025. It is estimated that US exports increased to 100 million st in 2023, based on January through October data. Exports are expected to fall to 91 million st in 2024 and rise again to 95 million st in 2025.

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

Finally, the EIA expects total coal consumption to fall to 457 million st in 2025 because of lower electric power consumption. It forecasts that other sectors in the market for US coal consumption will remain marginal or relatively stable.