Spot steam coal price trends varied across key basins in 2013. Compared with 2012, while total coal demand increased, total coal supply decreased, yet regional differences in market fundamentals resulted in different spot price trends. Central Appalachian (CAPP) coal prices trended downwards, Northern Appalachian (NAPP) and Powder River Basin (PRB) coal prices trended upwards, and Illinois Basin (ILB) and Rocky Mountain coal prices remained largely unchanged.
Coal demand increased in 2013. Higher natural gas prices in 2013 resulted in the greater use of coal for electricity generation and higher domestic consumption of coal. This resulted in total coal consumption in all sectors in the first 11 months of 2013 of 35 million tons, or 4%, more than the same period of 2012. Meanwhile, total coal exports in the first nine months declined by nearly 8 million tons compared to the same period in 2012, following a few years of growth. Continued weakening in the European economy, slower demand growth in Asia, increased output from other coal-exporting countries, and lower international coal prices all contributed to the decrease in U.S. coal exports. International coal prices have increased since the third quarter of 2013 and supported an increase in exports toward the end of the year, which would reduce the drop between 2012 and 2013. Overall, the increase in domestic consumption more than offset the decline in exports, resulting in higher year-on-year total coal demand.
Categories: Electricity, Energy