August 1, 2018, by Mathew Carr
U.S. exports of coal used by power stations are set to hit a record this year on increased global demand for the nation’s high-energy-content fuel.
Steam-coal shipments will probably jump 58 percent to 58 million metric tons this year, according to Guillaume Perret, founder of Perret Associates Ltd., a London-based research company. He expects exports to reach 65 million tons by 2025.
President Donald Trump was elected partly on a platform of boosting the U.S. coal industry. U.S. production, including metallurgical coal used for steel production, advanced last year for the first time since 2013.
“Historically, exports of U.S. coal have been handicapped by its high sulfur content,” said Perret. “However, we think this will gradually be offset by its high calorific value, which is becoming increasingly scarce worldwide.”
Perret anticipates a further diversification of U.S. coal exports away from western Europe toward other markets including those in northeast Asia.
Still, the surging American exports probably won’t be enough to plug a supply shortfall in the global market. Investors are focusing on cleaner energy sources, reducing their appetite for new projects and helping spur the current supply deficit.
“Despite the significant increase in U.S. exports, we still envisage a significant deficit of 19 million tons in worldwide coal exports versus imports in 2018,” Perret said.
The biggest buyer of U.S. coal in the first quarter was India, where thermal plants help generate about three-quarters of its electricity. An official from that Asian country earlier this year criticized Trump for seeking to pull out of the Paris climate deal while the U.S. has been a major contributor to emissions during its history.