India’s shift away from coal and towards greener fuels, coupled with the decline in European coal consumption, is set to dent the export volumes of the fuel from the US in the current year, according to the Institute of Energy Economics and Financial Analysis (IEEFA). US exported 115 million tonne (MT) of coal in 2018. This was 15 percent of the total domestic production of 753 MT. The country has been a consistent exporter of metallurgical coal used in steelmaking.
Since 2010, U.S. coal companies have exported an average of 58.3 MT, with the largest share going to European steelmakers while other major importers being Canada, Brazil, Japan, and India.
On the thermal coal side of the export market, US has traditionally been a swing supplier, selling into the market when other suppliers could not meet demand, largely because the distance from the US to major importers like India rendered the economics borderline except during the strongest markets.
“The past two years have been just that, strong markets that pushed U.S. thermal coal exports up sharply. In 2017, those markets more than doubled, to more than 41 MT from 19.7 MT in 2016. The upswing continued in 2018, with total thermal exports hitting 54.2 MT,” the report said.
Thermal coal exports to India accounted for much of this growth, climbing 92 percent to just under 9 MT from 2017 through the end of September in 2018.
According to IEEFA, the “mini-export boom” of the past couple of years has hit its peak as the European countries are moving quickly to reduce their thermal coal consumption and more than 20 percent of current US shipments are bound for Europe.
Also, India has aggressive plans to reduce its reliance on coal-fired generation, and in the Indian market, US exporters face intense competition from Australia and other closer-to-market suppliers.
