Will there be enough coal this winter?

Inventory conservation and a delayed start of cooler temperatures have allowed the volume held in coal stockpiles to improve. Most utilities have built stock levels sufficient to take them through periods of high demand this winter. However, if the winter weather takes a severe turn, coal availability for power generation could be tested.

Will US coal supply improve in 2023?

Declining demand in the US power sector brought on by additional coal unit retirements combined with signals that coal production will, at least, remain steady or increased means coal supply should be adequate for 2023. Supporting this is numerous reactivations of idled coal mining properties which signals considerable interest in coal production. Further, there is a new metallurgical longwall due to commence production in mid-2023. However, supply improvements in the US have proven to be challenging, costly, and slow.

Will US metallurgical coal continue to be sold into thermal market?

Deteriorating economic conditions globally and within the US has slowed demand for steel products. Some metallurgical coal has been sold in the thermal markets, both within the US and overseas as the positive price margin for metallurgical coal compared to thermal coal has mostly disappeared. For the near term, this situation is expected to continue and seaborne thermal will act as a price floor for metallurgical coal. Met-to-thermal switching in 2023 will be influenced by the availability of natural gas, the weather, changes in the geopolitical situation and the ability for Europe and the US to grow its economy.

Will US export demand improve with the embargo on Russian coal in place?

US thermal and metallurgical coal exports are positioned to grow in 2023. The high heating value of US thermal coal will be needed in Europe for years to come as a replacement for Russian supplies. Europe will continue to import coal as replenishing the loss of Russian natural gas next year appears highly improbable. New metallurgical supplies coming to the market should supplement met exports in 2023 and beyond. The US should be able to participate assuming rail service continues to improve.