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Short-term outlook for US coal industry is steady

World Coal,

The closing of coal-fired power plants responding to the Mercury and Air Toxics Standards has reduced US demand for coal for 2015, according to the US Energy Information Administration (EIA). Decreasing gas prices are also driving a decline in coal consumption. Natural gas-fired generating units that typically rely heavily on coal-fired generation can be run more economically at higher utilisation rates, as a result of low natural gas prices.

Projections of increasing prices of natural gas, together with projections of increased demand for electricity could lead to increasing coal consumption in the electric power by 1% next year. Nevertheless, the EIA predicts coal consumption will reduce by 6%, chiefly due to low natural gas prices.

Coal production

US coal production for 2014 increased 1.3% from 2013. The EIA estimate total production was 997 million short t, a y/y increase of 13 million short t.The administration anticipates production in 2015 will decline 7% (66 million short t), as a result of lower domestic consumption and exports of coal. All coal-producing regions are expected to see a reduction. Appalachia is anticipated to encounter the largest decrease of 34 million short t (13%); declines in Western regions are estimated to be 2% and 5%.

Coal production in 2016 is predicted to be even.

Coal trade

In the US for 2015, exports are projected to fall by 10 million short t to 87 million short t, but will increase by 2 million short t in 2016. US imports are anticipated to remain close to the levels on 2014; an increase of 2 million short t to 11 million short t.

Coal prices

The yearly average coal price to the electric power sector dropped to US$2.36million Btu in 2014 and is expected to average US$2.31 million Btu in 2015 and US$2.32/MMBtu in 2016.

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