Miners not benefiting from increased US coal consumption
According to the latest data, coal stockpiles at the country’s power plants has dropped below the monthly five-year average for the first time since December 2011.
The US Energy Information Administration (EIA) reports Thursday inventories have been falling because of a colder than usual winter and rising natural gas prices which prompted some power plants to switch to coal.
While this should be good news for coal miners – total coal consumption was indeed up 11% in Q1 2013 compared to last year – the EIA points out “receipts of coal at electric power plants actually decreased 5%” because of the historically high levels of stored coal that power plants could use.
Source: U.S. Energy Information Administration, Electric Power Monthly.
The situation is not expected to improve much going forward either because US exports of steam and metallurgical coal are falling faster than domestic stockpiles are being depleted.
US coal production is therefore expected to remain flat in 2013 and only show a modest 3% annual rise in 2014.
Coal fuels about 40% of total power generation in the US, an improvement from a low of 32% in April 2012, when natural gas prices were near 10-year lows.
Source: U.S. Energy Information Administration, Short-Term Energy Outlook.
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