Seaport Global analysts project sharp drop in U.S. thermal coal exports in 2019 and 2020

first_imgSeaport Global analysts project sharp drop in U.S. thermal coal exports in 2019 and 2020 FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($): U.S. thermal coal exports are expected to fall as much as 12% in 2019 and 25% in 2020 given the declining Northern European delivered price, which will put pressure on the U.S. utility and lower-grade U.S. metallurgical prices, Seaport Global analysts wrote April 8.Since October 2018, when the S&P Global Platts CIF ARA was assessed above $100/t, the price front-month CIF ARA price has dropped about 47% to $55.05/t on April 5. The price level for healthy U.S. exporters, Seaport senior analyst Mark Levin and senior associate analyst Nathan Martin wrote, is between $80/t and $90/t, based off the API2 price, with $75/t as the lower limit to keep exports afloat.On April 5, the analysts noted an API2 price of $74/t.Several U.S. producers have locked in tons into the export market at fixed prices, but “a lot of coal that was previously targeted for the export market could find its way back into the U.S. domestic utility market later [in 2019] and in 2020,” Levin and Martin wrote, which would put extra pressure on U.S. utility prices in heavy thermal export regions such as Northern Appalachia and the Illinois Basin.Approximately 54 million tonnes were exported into Europe and Asia when the front-month price averaged $92/t for the year, compared with exports averaging 35 million tonnes in the preceding five years when the price averaged $72/t.Levin and Martin listed a mild winter in Europe, weak natural gas prices, restriction in Australian imports into China, along with more Russian coal making its way into Europe as reasons why the price has dropped so significantly.More ($): Seaport: Falling U.S. thermal coal exports to put pressure on local utility marketlast_img read more

Read More »