The U.S. coal industry rebounded in the third quarter of last year after a dismal, pandemic-stricken spring, according to a report released by the U.S. Energy Information Administration. Production reached 136 million tons of coal in the third quarter, marking an 18% increase over the previous quarter.
But coal’s general decline continued: 2020′s third-quarter production represented at least a seven-year low and a 25% drop compared with the third quarter of 2019, when the industry mined 182 million tons.
Alliance Resource Partners CEO Joe Craft explained in his company’s earnings call last fall that warmer weather helped drive up electricity demand.
“With peak electricity loads increasing in July and August to support cooling demand, coal-fired generation rebounded even stronger in the third quarter,” Craft said in October. Coal consumption also bounced back. The United States consumed about 148 million tons in the third quarter, a 54% increase over the second quarter’s 96 million tons but a 11% drop compared with 2019 levels.
Exports remained steady at about 15 million tons, with steelmaking metallurgical coal accounting for two-thirds of that figure.
Miners in Western states, which produced about 58% of U.S. coal in the third quarter, had hoped to increase exports through the proposed Millennium Bulk Terminals project in Washington state. But Lighthouse Resources Inc., operator of a mine in Montana and developer of the unfinished Millennium project, filed for bankruptcy protection last month.
Moody’s Investors Service projects a slight but temporary reprieve for the coal industry in 2021 due to overall economic recovery and an expected uptick in natural gas prices, which reached historic lows last year. Weak international pricing could limit gains in seaborne markets, the 2021 outlook from Moody’s says. Mining companies have been shifting their focus to metallurgical coal as more utilities take power plants fired by thermal coal offline.
Moody’s predicts coal’s share of power generation will continue falling in 2022 and hit around 10% by 2030. Coal’s share in 2019 was 23%, according to EIA.Go back to previous page