US coal exports in the second quarter declined 2.0% compared to the prior quarter but were 2.8% higher than the same quarter of 2022, according to S&P Global Market Intelligence data.
The US sent 22.2 million metric tons of coal abroad in the second quarter of 2023, down from 22.6 million metric tons in the first quarter. US thermal and metallurgical coal producers with the right product and access to ports have found support in markets abroad, as demand has been dragged down by a consistent decline in domestic thermal coal sales due to retiring coal-fired power plants.
For example, executives with Pennsylvania-based coal producer Consol Energy Inc. noted muted domestic coal demand due to a warmer winter and lower natural gas prices, during a May 2 earnings call. The company was able to pivot to a strong export market for its coal, executives said.
"Sales into the export industrial market outpaced sales into the domestic power generation market for the first time in our history," Consol CFO and President Miteshkumar Thakkar said on the call. "This is a crucial development for us as it demonstrates our ability to be nimble in utilizing our export marketing and logistic advantages to offset weakness in the domestic energy markets, a unique capability that few domestic coal and [exploration and production] companies possess."
However, export options are limited to companies with the right infrastructure, coal quality and sales connections. Consol also runs the Consol Marine Terminal in Baltimore and has focused on expanding coal throughput at the facility in 2023.
"We are dedicated to strategically shifting in more sales into the growing seaborne markets to offset declines in the domestic market over time," Consol CEO Jimmy Brock said. "Our future sales growth is in the export market, and owning our own terminal has always been and will continue to be a strategic advantage for CONSOL Energy."
India, the top buyer of seaborne US coal, purchased 4.7 million
Buyers in Japan, Brazil, South Korea, Canada, China and Germany also substantially increased coal purchases in the second quarter on a year-over-year basis.
Netherlands, the second largest buyer of US coal in the period, decreased its imports of US coal. Total shipments to the country were down by 8.7% year over year and by 10.7% quarter over quarter.
The United Kingdom, a relatively small customer for US coal, has sharply pulled back on imports of US coal, with total shipments falling 73.0% year over year to about 245,000 metric tons. Other European countries, including Croatia, Poland, France and Belgium, also substantially decreased purchases of US coal in the second quarter compared to the prior-year period.
On the other hand, Sweden and Spain, also relatively small buyers of coal from the US, increased purchase volumes by 546.2% and 203.6%, respectively, year on year.
Ports in Norfolk, Va.; Baltimore; New Orleans; Mobile, Ala.; and Seattle are major gateways for US coal to reach foreign markets.
Baltimore, the nation's second busiest coal port in the quarter, increased export volumes by 25.1% year over year in the second quarter. Most shipments leaving Baltimore were bound for Asia, but Europe was also a popular destination.
Meanwhile, second-quarter shipments from Norfolk, Va., the country's largest port by coal export volumes, increased year over year by 1.2%. Norfolk also ships a lot of coal to Asia and Europe. However, much of the coal shipped out of Norfolk goes into metallurgical coal markets, where buyers use the product to make steel.
In its most recent short-term energy outlook, the US Energy Information Administration projected that US coal exports will rise from 86.0 million short tons in 2022 to 99.9 million short tons in 2023 and 103.3 million short tons in 2024.
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