US coal exports to reach 3-year high amid war in Ukraine: EIA

Pointing to supply disruptions amid Russia's war in Ukraine, the Energy Information Administration April 12 revised upward their 2022 US coal export projections to three-year high 89 million st.

The estimated volume is 4.5% higher than 2021 exports and the highest since 92.9 million st in 2019, according to the EIA's April Short-Term Energy Outlook.

"We assume international prices will continue to drive increasing U.S. coal exports as the conflict in Ukraine creates the potential to disrupt supplies from Russia," the EIA said in the report. "However, exports to Asia and particularly China, which supported U.S. coal exports in 2021, have slowed in Q1 2022."

Domestic coal consumption is projected to increase 14.2 million st on the year in 2022 as Henry Hub spot prices climb to $5.43/MMbtu in 2022, compared with $4.06/MMbtu in 2021. The EIA estimates 2022 coal consumption at 560.1 million st, up 2.6% from 2021, with electric power consumption at 517 million st, up 3.1% from 2021.

Coal is expected to gain generation share at 22.9% of the stack in 2022, up 0.4% from 2021. The opposite is anticipated for natural gas as the share is expected to fall from 37.2% in 2021 to 35% in 2022 amid high prices.

Natural gas prices are expected to decline to $4.17/MMBtu in 2023 along with coal consumption, which the EIA estimates will shrink to 483.7 million st in 2023.

Nominal average delivered coal prices are projected to decline from $1.98/st in 2021 to $1.86/st in 2023, further encouraging market movements. Delivered coal prices are expected to decline again in 2023 to $1.82/st.

Coal production is expected at 621.2 million st, the highest level since 705.3 million st in 2019. Compared with 2021, production in 2022 is anticipated to be 7.4% higher. The EIA estimates that production will further increase in 2023 to 633 million st, up 1.9% on the year.