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  • bluecheese4u bluecheese4u Sep 16, 2013 9:34 AM Flag

    U.S. Coal Companies Scale Back Export Goals


    U.S. Coal Companies Scale Back Export Goals

    Published: September 13, 2013

    HOUSTON — The ailing American coal industry, which has pinned its hopes on exports to counter a declining market at home, is scaling back its ambitions as demand from abroad starts to ebb as well.

    Just south of here, New Elk Coal terminated its lease late last month at the Port of Corpus Christi, where it had hoped to export coal to Brazil, Europe and Asia. Two days later, when the federal government tried to auction off a two-square-mile tract of land in Wyoming’s Powder River basin, a region once poised to grow with exports to Asia, not a single coal company made a bid.

    They were the latest signs that a global coal glut and price slump, along with persistent environmental opposition, are reducing the likelihood that additional exports could shield the industry from slipping domestic demand caused by cheap natural gas and mounting regulations.

    United States coal exports this year are expected to decline by roughly 5 percent from last year’s record exports of 125 million tons, and many experts predict the decline will quicken next year.

    At the beginning of 2012, the coal industry had plans to expand port capacity by an additional 185 million tons. But those hopes have faded this year.

    “Global coal prices right now are not supportive of large-scale U.S. coal exports,” said Anthony Yuen, a Citigroup energy analyst.

    European demand is soft, and the economies of the developing world are slowing. But the main reason for the slumping prices is China’s softening demand growth, experts say.

    For most of the last decade, China’s soaring thirst for energy accounted for more than 50 percent of world coal demand, driving up international coal prices and stimulating mining activity across Australia, Indonesia and as far away as Colombia and South Africa. With Australia and Indonesia straining to produce for China, South Korea and Japan increasingly looked to the Un

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    • When talking about exports out of Australia, people assume China is the number one destination. Not so:

      In 2011, Australia's top four export markets for metallurgical coal were ---
      1) Japan (40.8 Mt)
      2) India (28.9 Mt)
      3) Republic of Korea (16.5 Mt)
      4) China (13.7 Mt)

      In 2011, Australia's top four export markets for thermal coal were ---
      1) Japan (65.4 Mt)
      2) Republic of Korea (29.5 Mt)
      3) China (19.9)
      4) Taiwan (19.1 Mt).

      Pakistan, the 6 most populous country in the world, is looking to switch to coal (from furnace oil). Currently they only derive 3% of their electricity from coal. Vietnam is another up and coming coal market. China, I believe we should look past the words, they'll continue to grow. India is way, way behind China in the process of industrialization and must try to keep up with China. India has about 300 million people without electricity. Tremendous growth potential there.

2.070.00(0.00%)Apr 13 8:06 PMEDT