US coal demand spiked last year, supply went the other way—EIA

The US coal mining industry saw a modest, but meaningful demand increase last year, driven mainly by higher natural gas prices that caused total consumption in the first 11 months to hit 35 million tons, 4%, more than the same period of 2012.

According to figures released Thursday by the Energy Information Administration (EIA) total coal exports in the first nine months went the opposite way, declining by nearly 8 million tons compared to the same period in 2012.

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 US coal exports, said the agency.

But the country also produced less last year. Total coal output fell 0.4% last year compared to 2012, hitting 4 million tons. Inventories also went down, dropping from by 31 million tons from the end of 2012 to 154 million tons at the end of September 2013.

Overall, the increase in domestic consumption more than offset the decline in exports, resulting in higher year-on-year total coal demand.

The EIA expects coal production to stay relatively constant for the next three decades, a forecast experts see as attainable, because regulators continue to be reluctant to let utilities become too dependent on natural gas.

Image by Gwoeii